Mondelez, Ferrero among chocolate majors to post healthy top-line growth

Nestle India, which dominates the confectionery space with leading brands like Kitkat and Munch, continues to hold the third spot in revenue.

Buoyed by the sweet tooth of Indian consumers, leading chocolate makers — Mondelez, Ferrero, Mars and Hershey — have registered healthy sales growth in 2018-19.

However, two of these companies — Mars International India and Hershey India — still remain in the red.

Mondelez India Foods — the marketer of Cadbury — continued to lead the pack with Rs 6,746 crore revenue. According to filings at the Registrar of Companies, its top line grew 9 per cent year-on-year (YoY) from Rs 6,189 crore.

The firm’s net profit, during 2018-19, jumped 42 per cent to Rs 462 crore from Rs 325 crore.

Italian chocolate maker Ferrero, which markets Ferrero Rocher and spreads like Nutella, witnessed 13 per cent rise in its revenue at Rs 1,473 crore. After incurring losses in 2017-18, the firm turned profitable last year with a net profit of Rs 106 crore.

However, the other two major players – Mars International and Hershey – continued to bleed with losses mounting further. While Mars posted Rs 246 crore net loss, Hershey India’s net loss widened to Rs 109 crore in 2018-19.

In the previous financial year, the two firm’s had reported Rs 195 crore and Rs 85 crore net loss, respectively.

In fact, Hershey has been in loss at least since 2014-15, although its bottom line improved with yearly loss coming down from a peak of Rs 365 crore five years ago.

Mars, however, registered the biggest jump among the four, when it comes to increasing sales. The firm’s revenue rose 34.5 per cent YoY to Rs 1,009 crore from Rs 750 crore. Its sales numbers, however, include non-confectionery products under pet care brands like Pedigree, Whiskas and Royal Canin.

Business Standard

GST anti-profiteering watchdog NAA imposes Rs 90-crore fine on Nestle

"The amount of Rs 73 crore shall be deposited within the next three months from the date of passing this order," the order said.

Business Standard : The goods and services tax (GST) profiteering watchdog imposed a penalty of Rs 90 crore on fast-moving consumer goods giant Nestle for not passing on the benefit of rate reduction to consumers.

The national anti-profiteering authority (NAA) noted that the methodology adopted by Nestle to pass on GST rate-cut benefit was ‘illogical, arbitrary, and illegal, which has resulted in unfairness and inequality while passing on the benefit of tax reduction’.

Nestle, the maker of Maggi, KitKat, Munch, and Nescafe, had already deposited Rs 16 crore in the consumer welfare fund last year on a voluntary basis and now requires to deposit Rs 73 crore within the next three months.

“The amount of Rs 73 crore shall be deposited within the next three months from the date of passing this order,” the order said.

The NAA held that the benefit of rate reduction was to be passed on for each stock keeping unit (SKU) and not at the product level. It observed that the benefit was either not passed on for some SKUs, while more than the required benefit was passed on in some SKUs within a category. It noted that the ‘most simple and appropriate methodology required to be adopted was to calculate the new maximum retail price (MRP) for each SKU, according to the tax calculation and to charge it accordingly’.

According to the anti-profiteering rules under GST, “benefits of input tax credit should have been passed on to the recipient by way of commensurate reduction in prices.”

Nestle India spokesperson told Business Standard that, “Nestle India as a responsible corporate citizen has passed on the benefits of GST to consumers and will consider appropriate actions after studying the order by the NAA. It further said that the benefits largely have been passed on by way of reduction of MRP or by way of increase in grammage. Further, on SKUs where it was not practicable to pass on the benefits, say for example Nescafé single-serve packs for Rs 2 or Maggi noodles Rs 5 packs, the benefit has been passed on other pack sizes within the same product category,” it said.

“The information regarding passing of GST rate reduction benefit together with substantiations had been provided to the NAA. However, we are disappointed that NAA has not accepted the methodology adopted by us to pass on the GST rate reduction benefit. We are studying the order passed by the NAA and will consider appropriate action as advised,” added Nestle.