Mumbai, March 2 : Fast moving consumer goods major, Hindustan Lever Ltd (HLL) has decided on taking a price reduction in processed foods based on fruits and vegetables which have been exempt from excise duty levy.According to an HLL spokesperson, the company will be taking a price reduction on fruit and vegetable based processed foods. However, the extent to which the price will be reduced is being worked out.The duty on fruit and vegetable based processed foods was reduced in the Budget 2001-02, from 16 per cent to nil.
In addition to HLL, other companies that are likely to pass down the price reductions to the consumer include Marico Industries, which makes the Sil range of processed foods, Heinz and Nestle India.
The move is expected to spur consumption while also supporting the farmers to improve realisation of their produce.
Canned and processed fruits and vegetables is a Rs 136 crore business for HLL. This forms a marginal 1.2 per cent to the multinational's total turnover at Rs 10,604 crore for the year 2000. This business grew at the rate of 10 per cent over the previous year's sales of Rs 123 crore.
HLL markets processed foods under the Kissan brand of tomato-based products - like ketchup, sauce and puree - jams and squashes. The company is a market leader in these categories. The business is backed by contract farming in Punjab and Karnataka.
According to Heinz India managing director Pradeep Poddar: "The move to remove excise levels on fruit and vegetable based food processing products will enable the companies to focus more on value addition in order to prop up the growth of food processing industry. This will give companies a chance to educate the consumer on the benefits."
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
