'Gabbar ki Pasand' Parle G Shuts Oldest Factory in India

Mumbai, September 5, 2019:

India’s oldest factory of Parle G biscuits has shut permanently after running for 87 years.

The factory located at Vile Parle in Mumbai was shut down following low productivity over the past few years.

It has been reported that Parle G owners had paused production of the factory a few weeks ago.

It may be mentioned that on August 22, a notification was released announcing that it may have to let go of 8,000-10,000 employees if the ongoing consumption slowdown persists.

The layoff is a result of the declining economy that has also led to the layoffs in many other industries.

Mayank Shah, category head of Parle Products, in response to the impending layoffs said, “We have sought reduction in the GST on biscuits priced at Rs 100 per kg or below, which are typically sold in packs of Rs 5 and below, but if the government doesn’t provide that stimulus, then we have no choice but to let go of 8,000-10,000 people from our workforce across factories as slowing sales are severely impacting us.”

Parle-G, Monaco and Marie brand of biscuits, employs 1 lakh people and operates 10 company-owned plants, in addition to 125 third party manufacturing facilities with sales of over Rs 10,000 crore

More than half of Parle’s sales come from rural markets.

Earlier, the sub-below Rs 100 per kg biscuits were taxed at 12%. Firms had expected the GST rate to be fixed at 12% for premium biscuits and 5% for the lower-priced ones. But after the government introduced the GST in 2017, all biscuits were brought under the 18% tax structure, forcing companies to increase prices which affected sales. Following this the Parle, too, increased its prices by about 5%, which led to sales declining significantly, as stated by the category head.

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