| 2 minutes read

2 minutes read

Parle May Fire 10,000 Employees Soon. See Why

| Published on August 22, 2019

The instant thought of any Indian when you think of “Chai” is “Parle-G”- the iconic couple indeed!

Parle, India’s largest biscuit manufacturer best known for its product Parle-G has indicated that it could lay off around 8,000-10,000 employees due to decrease in demand and consumption.

“We have sought reduction in the goods and services tax (GST) on biscuits priced at Rs 100 per kg or below, which are typically sold in packs of Rs 5 and below, but if the government doesn’t provide that stimulus, then we have no choice but to let go of 8,000-10,000 people from our workforce across factories as slowing sales are severely impacting us,” said Mayank Shah, category head of Parle Products.

Parle, founded in 1929, employs about 1,00,000 people, including direct and contract workers across 10 company-owned facilities and 125 contract manufacturing plants.

Mayank Shah explained how the demand for popular Parle biscuit brands such as Parle-G had been worsening since the government rolled out a nationwide goods and services tax (GST) in 2017, which imposed a higher levy on biscuits costing as low as Rs. 5 a pack.

The higher taxes have forced Parle to offer fewer biscuits in each pack, hitting demand from lower-income consumers in rural India, which contributes more than half of Parle’s revenue.

“Consumers here are extremely price-sensitive. They’re extremely conscious of how many biscuits they are getting for a particular price,” Mr Shah said.

Shah also said that they have in the past one year held talks with the government’s GST Council as well as Former Finance Minister Arun Jaitley to review tax rates.

The news come in the wake of slowdown in Indian economy. Parle’s arch rival Britannia also seems to be going head to head with the company on this as they are also facing the similar issue.

Varun Berry, managing director of Britannia Industries Ltd, Parle’s main competitor, said earlier this month that consumers were “thinking twice” about buying products worth just Rs.5.

“Obviously, there is some serious issue in the economy,” Berry said.

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