Single-use plastic ban may hike costs for FMCG companies; 15-20% raise likely

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Published: September 18, 2019 4:38:28 PM

While the nation is gearing up for an anticipated blanket ban on single-use plastics, FMCG companies have raised concerns about the same as it is likely to raise the packaging costs for fast-moving consumer goods companies.

FMCG SlowdownIn India, Nestle, Hindustan Unilever, Godrej, ITC, PepsiCo, Coca-Cola, P&G etc are some of the major FMCG companies.

While the nation is gearing up for an anticipated blanket ban on single-use plastics, FMCG companies have raised concerns about the same as it is likely to raise the packaging costs for fast-moving consumer goods companies. FMCG companies are afraid that the proposed ban on the thin wrapping and small plastic bags will hike costs of overall packaging and distribution by 15-20%, CNBC TV-18 cited sources as saying. Jumbo packs, bundled packs and value packs could take a hit, the news channel added. The plastic packaging is used in an array of products including soaps, shampoo sachets, chips, biscuits etc and the government’s move is likely to impact FMCG companies. 

In India, Nestle, Hindustan Unilever, Godrej, ITC, PepsiCo, Coca-Cola, P&G etc are some of the major FMCG companies and almost all of them deploy plastic packaging across various products. According to the news channel sources, the industry is also seeking clarification of BOPP under the widely anticipated ban. The government is expected to soon release the final list for the banned products. 

The government has waged a war against single-use plastic items, including bottles and various industry leaders have sought the removal of the proposed ban. Previously, the Packaging Association for Clean Environment (PACE) and the All India Association of Natural Mineral Water Industries said that they have requested the government to consider exclusion of PET water bottles from list of banned items as they are 100% recyclable. Central Pollution Control Board (CPCB) has proposed banning of 12 items such as thin carry bags, non-woven carry bags, small wrapping, straws, plastic cups, etc.

Meanwhile, even though the government stands firm on its ground to discontinue single-use plastics, Food and consumer affairs minister Ram Vilas Paswan said that there is no feasible alternative to packaged drinking water. The same could mean that the government may exclude 1-litre water bottle from the plastic ban. “We have not got any concrete alternative of packaged drinking water. Therefore, I have asked all manufacturers to send their suggestions by September 11,” the minister said earlier in September. 

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