FMCG Firms Brace for Rs. 2,000 Crore Packaging Waste Risk While Adding 6–8% More Product in Small Packs Post-GST Cuts

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FMCG companies are moving quickly to make sure shoppers see the impact of GST cuts from September 22, 2025. Prices of several daily-use products are falling as the GST Council merges tax slabs and reduces them on essentials. Biscuits, chocolates, soaps, shampoos, toothpaste, ice creams, and fortified waters are now classified under the 5% slab, whereas they were earlier under the 12% or 18%.

This change means new MRPs are being printed and fresh stock is already on the way to stores. Companies such as Zydus Wellness, Godrej Consumer Products, and Kellanova have adjusted production to focus only on new packs with reduced prices. Dispatches are also being timed so that stores with low inventory get the first supply of cheaper products.

Old Stock Problem and Pricing Challenges

Old packs with higher MRPs are still considered an issue. Firms are asking the government to allow restickering so that new prices can be added to old stock. Without approval, these products will either need discounts at billing counters or fresh packaging. The industry wants to avoid throwing away stock, which could cause packaging waste of nearly Rs. 2,000 crore.

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Distributors and retailers are waiting for clarity on how old stock will be handled. Many retailers have already slowed purchases of older inventory because they do not want to face losses. The main question is who will cover the difference when products are sold below the printed price. The All India Consumer Products Distributors Federation has raised this matter with the government.

Impact on Small Packs and Packaging

Small packs like Rs. 5 and Rs. 10 biscuits or chocolates come with another challenge. Their price points are fixed. For these, companies are increasing grammage, meaning shoppers will get 6–8% more product at the same price. Larger packs will see a clear price reduction of around 3–5%. In namkeens, adding weight is easier, but chocolates and biscuits need changes in artwork and design, which can take weeks.

Packaging firms are also under pressure. Companies like UFlex are working with big brands to redesign packs. But this process takes time, especially when grammage changes require technical adjustments.

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Despite short-term hurdles, the sector expects shoppers to see reduced prices by early or mid-October. Lower costs are expected to boost demand, especially in rural and small-town markets where budgets are tight. Analysts believe this GST change will free up household money and push overall consumption, giving the FMCG industry a strong festive season ahead.

The direction is clear. FMCG companies will cut prices, adjust packs, and use grammage to pass on savings. For the common shopper, daily-to-daily stuff shall soon grow less expensive, marking this as one of the biggest consumer wins arising out of the new GST structure.