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Soap and Soft Drink Makers Worst Hit by Weather, GST Impact; Expect Recovery in December Quarter
Business Situation: Major global companies, including Unilever, Reckitt, Heineken, PepsiCo, and Coca-Cola, reported challenges in September due to disruptions in trade channels.
Consumer buying slowed down in the hope of GST reforms, and unseasonal rains hit sales of FMCG companies during the September quarter. Soap-making and cold drink companies were the worst affected. But they hope that sales will pick up in the December quarter.
Major global companies, including Unilever, Reckitt, Heineken, PepsiCo, and Coca-Cola, reported challenges in September due to disruptions in trade channels. Unilever Chief Executive Officer Fernando Fernandes said, "Our performance in emerging markets is improving, especially in India. We are in a very good position here in the medium term." While the GST reform has had some impact in the short term, it's very good news for 40 percent of our portfolio, as it has reduced prices by approximately 10 percent.
British company Reckitt stated that the implementation of the new GST slabs affected net revenue growth in India. However, Dettol sales increased. Chief Financial Officer Shannon Eisenhardt said the impact of the GST phase-in was in the low to mid-single digits in the third quarter. The company has very successful businesses in China and India.
