Biscuit makers to hike prices by 10 to 20%

 Biscuit makers to hike prices by 10 to 20%; Rise in raw material costs

After bread, the price of biscuits, another staple food for the common man, is set to experience a steep hike - 10 to 20 per cent.

The reason for the hike is the same as in case of bread - unprecedented rise in prices of raw materials used to make biscuits.

This was informed by K P Mohandas, secretary-general, Indian Biscuit Manufacturers' Association (IBMA), as among the key challenges the biscuits sector was facing in the country, while speaking to FnB News over telephone.

In fact, according to Mohandas, smaller players in the industry not only had to deal with raw material price hikes but suffered even more as they were discriminated against by the respective state governments, which levied 13.5-14 per cent value-added tax (VAT) on products manufactured by them.

As a way out, Mohandas suggested, "We would like them to reduce it to five per cent so that it is on par with edibles that aren't consumed by the commoner."

He added, "Three or four years ago (i.e. in 2008-2009), excise duty - known as Central Value-Added Tax (CENVAT) - was applicable to all biscuits, irrespective of their maximum retail price (MRP)."

"Now, biscuits whose MRP exceeds Rs 100/kg are subject to eight per cent CENVAT, and that is what we have urged the government to abolish. To the inexpensive ones, CENVAT does not apply," he explained.

Even then, "Everybody is affected by the price hike (which dates back four years), but bigger biscuit makers have the financial muscle to cope with it," he said.