With the production of goods coming to a grinding halt due to lockdown, retailers of essential commodities are now facing a low stock situation.
With the production of goods coming to a grinding halt due to lockdown, retailers of essential commodities are now facing a low stock situation. While supplies of some brands have slowed down, others have completely come to a halt and retailers are now scrambling to get supplies. In light of the same, the Ministry of Home Affairs has written to all states and has said that as production is down, “the possibility of inventory building/hoarding and black marketing, profiteering, and speculative trading, and the resulting price rise of essential goods cannot be ruled out”. The government has also sought out facilitation of enough labour availability so that production of essential food and grocery items can be resumed, The Indian Express reported.
FMCG majors such as HUL are now operating at lower levels with the Indian arm of British-Dutch company now working at 60% of its pre-lockdown capacity, The Indian Express cited sources as saying. For now, there is no telling as to when will the supply chain bounce back to normal. Others also complained of lower availability of raw material and issues related to shipping out finished products.
“The supply chain for any single FMCG product typically consists of 20-30 components and their seamless movement is absolutely necessary to ensure continued production and uninterrupted supply of the final product to consumers,” Shahrukh Khan, executive director-operations, Dabur India, told the newspaper. Dabur is also facing challenges pertaining to procuring of raw material and packing material. Another FMCG major ITC is also operating with reduced workforce and limited working hours.
For retail chains such as Walmart, this has culminated into struggling to keep up with sufficient supplies, a spokesperson told the newspaper. The country has been put under a lockdown for 21 days due to coronavirus. It is uncertain for now whether the government will extend the lockdown as it races to contain the spread of the virus.