Daijiworld Media Network – New Delhi

New Delhi, Sep 23: India’s iconic Rs 5 and Rs 10 FMCG packs are disappearing from store shelves as companies adjust prices ahead of the next-generation GST reforms, coming into effect Monday. Parle-G, which sold its smallest biscuit pack at Rs 5 for two decades, has now priced it at Rs 4.45. Similarly, a Rs 1 candy now costs 88 paise, and a Rs 2 shampoo sachet is priced at Rs 1.77.

The GST reforms, announced earlier this month by Finance Minister Nirmala Sitharaman, reduce tax slabs to two broad rates — 5% and 18% — and move many food items to the NIL tax bracket. Ahead of the rollout, Prime Minister Narendra Modi called it a “GST savings festival”, promising benefits for consumers across all segments, including the poor, middle class, youth, farmers, and entrepreneurs.

Companies are awaiting clarity on whether increasing product weight while keeping prices similar can be treated as a price cut under the new regime. Mayank Shah, Vice President at Parle Products, said consumers might use UPI for exact payments or buy larger/multiple packs to adjust for fractional prices.

Mondelez India has already shifted products to nonstandard price tags: Bournvita at Rs 26.69 (from Rs 30), Oreo at Rs 8.90 (from Rs 10), and Gems and 5Star at Rs 17.80 (from Rs 20). The company said new prices reflect GST benefits, which distributors must pass on to consumers.

For decades, FMCG brands relied on “magic price points” of Rs 5, 10, and 20 by adjusting pack sizes during inflation. Industry experts say the regulatory ambiguity has forced a temporary move away from these small packs, though they remain crucial: small packs contribute 79% of shampoo sales, 64% in biscuits, 58% in chocolates, 44% in salty snacks, and 29% in toothpaste.

Sushil Kumar Bajpai, President at RSPL Group, said prices for existing stock have been reduced by 13% to pass on GST benefits, leading to “obscure numbers” on price tags. He added that companies are now exploring simplified approaches for future stocks.