Mumbai: The unorganised and local players in the Fast Moving Consumer Goods (FMCG) sector has ceded space to much larger org-anised players after the implementation of GST.
The pan-India trend, according to a study conducted by ICICI Securities, indicates that the organised sector is the key winner over unorganised players.
With dominance of trade by large players, unorganised and small local or regional players are finding it difficult to cope with the current distribution infrastructure.
“The largest beneficiary of the trade disruption is organised packaged food segment. With contribution of unorganised players at 30-40 per cent in key food segments such as biscuits, chips, Indian namkeen, lack of preparation ahead of GST rollout is leading to swift loss in business for them. Food companies are gaining in the marketplace,” it said.
While wholesale trade witnessed a poor throughput in July, the activity in the subsequent month saw a pick up as GST officials clarified that distributors can raise both tax invoice and retail invoice. However, with the e-way bill (requiring any good more than Rs 50,000 in value to be pre-registered online before it can be moved) likely to come into force from October, 2017, analysts believe that the wholesale channel is not yet out of the woods and higher salience in the segment may impact throughput even in Q3FY18.
