August 28, 2025

NEW DELHI: Get ready for a tasty change in your daily essentials! Popular makers of snacks, biscuits, shampoos, and tea are planning to add more weight or quantity back to their small Rs 5 and Rs 10 packs. Why? Because the big GST tax change is coming soon, and lowering prices on these tiny packs might be too tricky. Instead, companies want to give you more product for the same price!

Vipul Prakash, CEO of DFM Foods, which sells Crax salty snacks, said, "Since our products come at fixed prices of Rs 5 or Rs 10, it is impractical to change pricing. We will, however, increase grammage per pack wherever possible." This is exciting news because for the past two years, many companies cut the pack sizes silently—a sneaky move called shrinkflation—while keeping prices the same. They did this because the prices of raw materials like palm oil, coffee, and cocoa soared by up to 100%!

Prime Minister Narendra Modi announced major GST reforms in his Independence Day speech, and the GST Council is set to meet on September 3-4 in New Delhi. The plan? Scrapping the confusing 12% and 18% tax rates and sticking to just 5% and 18%, with most daily essentials getting the lowest tax rate.

Varun Berry, Executive Vice-Chairman and MD of Britannia Industries, said, "Biscuits, which have near universal usage, are overwhelmingly consumed down to the smallest village, priced at `5-10. While the proportion of Rs 5-10 packs for Britannia is around 62%, for the larger industry, it is even greater. Hence, a reduction from 18% to 5% will benefit the right segment of society."

Other big players are also racing to make quick changes. Akshay Bector, MD of Cremica Food Industries, shared, "Relevant grammage which had to be taken off will come back in packs and this will be done very quickly; we will work on adjustment in weight, particularly for small packs. The entire FMCG market has been quite constrained; the expected GST reduction should help in spurring demand."

Many companies said changing prices on tiny sachets is tough because new packaging must be printed and small price changes cause trouble in billing. So instead, they plan to restore the original pack sizes fast. A senior exec at a leading shampoo brand said, "We will, however, reduce prices of bigger packs, depending on the new tax slabs."

Distributors smell a sweet chance here. One top FMCG distributor in Delhi said, "Companies making candies, noodles, and tea have sounded us off that they could replenish fresh stocks within days of the GST reductions being announced, and get some first mover advantage."

Big names like Nestle, ITC, Tata Consumer, and Hindustan Unilever are key players ready to bring the new GST magic to your favorite daily items.

Brokerage firms agree that lower GST will boost demand. Jefferies noted, "A lower tax on these (everyday essentials including packaged foods, personal care and ayurveda) products can help improve demand at a time when the consumer sector has been facing a moderate growth trend." Nomura expects snack-makers to be winners here.

Krishna Khatwani, head of sales at Godrej Consumer Products, said, "Companies would look to pass more value to their customers through higher volume for relevant categories or lower price points."

Good news for you—this GST makeover could mean better packs on store shelves and a juicy boost in sales soon. NielsenIQ reported packed food, cleaning, and personal care products volumes edged up 6% in first quarter FY26 compared to 5.1% earlier. So watch out for bigger packs and fresh deals hitting your local shops!

Read More at Economictimes →

Tags: Gst reform, Fmcg, Shrinkflation, Small packs, Price changes, India,