By Jyotsna Bhatnagar, Nayan Dave and Mithun Dasgupta
Even as FMCG firms are all set to follow the ban on single-use plastics effective July 1 by adopting alternatives, most companies do not intend to pass on the additional costs to the consumers, at least in the short term.
As RS Sodhi, MD of Anand-based Gujarat Cooperative Milk Marketing Federation, which owns the country’s largest food and dairy brand Amul, told FE “Though we had sought some extra time to prepare alternatives, we have managed to locally procure a part of our requirement of biodegradable plastic straws, besides paper straws from South Korea and China that will be delivered by mid-July.” Amul has a daily requirement of around 1 million small straws for its bestselling tetra pack sweet lassi, Masti Chaas and Tru flavoured milks alone. “Admittedly, paper straws are at least six to seven times more expensive than plastic straws, but we won’t pass on the increased cost to customers in the short term,” Sodhi added.
To ensure that long-term costs stay under control, the brand has plans to create biodegradable straw manufacturing units within Amul’s facilities soon, revealed Sodhi. Moves are also afoot to redesign spouts of small tetra packs to eliminate the use of straws.
Other FMCG giants Dabur, Emami, Vadilal, Rasna, etc, are also set to meet the challenge. Consumer goods major Dabur, which has a huge market share in the health drinks market with its Real brand of fruit juices, is also a major user of straws. “Dabur has already commenced production of Real juice packs with integrated paper straws. We are committed to meeting the regulations and will ensure that all packs come with integrated paper straws,” said Shahrukh Khan, ED, operations, Dabur India. And even though the paper straws are being imported and cost more, the company is currently absorbing the cost and not passing them on to consumers, Dabur sources told FE.
As per industry estimates, the cost per unit of a paper straw is 30-40 paise, while that of plastic is 10-15 paise.
Kolkata-headquartered FMCG major Emami, too, is all set to ban single-use plastics. “Since the past few years, we have gradually brought down the use of single-use plastics. There are some cost implications involved in transforming to a total ban, but the likelihood of a rise in product cost is not on the cards for the time being,” said Naresh Bhansali, CEO, finance, strategy and business development, and CFO, Emami.
Several brands have already been in the transition process for sometime now. Ahmedabad-based Rasna, the country’s largest soft drink concentrate manufacturer, is totally prepared for the plastic ban. “Ban on single-use plastics will not affect us as we are not using inferior quality plastic for even packaging purposes.
For the past five years, we are already using permissible grade plastics. None of our products require straw or plastic cutlery items currently,” said Piruz Khambatta, chairman and MD of Rasna. Similarly, Devanshu Gandhi, ED & MD of Vadilal Industries, a leading ice-cream maker in the country, said the ban on single-use plastics would not have any impact on Vadilal’s business. “We are not using single-use plastic. Hence, the notification will not make any difference to us,” he claimed.
All India Plastics Manufacturers’ Association director-general Deepak Ballani, however, pointed out that the focus should also be on proper management of plastic waste. “We need to improve waste segregation and ramp up our recycling infrastructure,” he said.