Leg-up for poultry, meat industry

BRANDED MEAT/ Excise duty on branded & packed preparations of meat, fish & poultry cut to 8%

Good news for non-vegetarians: The price of branded chicken and fish will drop a bit. Excise duty on branded and packed preparations of meat, fish and poultry has been reduced from 16 per cent to 8 per cent.

Major companies in the segment are Godrej Agrovet, Venky's, Al-Kabeer and Meat Products of India.

Subba Rao, vice president, Godrej Agrovet, said, "We will pass on the benefits of duty reduction to consumers." So the price of a one kg pack of processed chicken, which now costs around Rs 150, will fall by around Rs 10.

In order to drive 'out of home' consumption, the finance minister P Chidambaram has exempted excise duty on non-alcoholic beverages such as chocolate and malted food drinks prepared and dispensed through vending machines. The excise duty was 16 per cent. So the prices of these products too could dip.

The Budget's focus on rural India could also provide a fillip to the Rs 85,000 crore fast-moving consumer goods (FMCG) industry, because almost 50 per cent of its revenues originate there.

The fortunes of the FMCG sector are largely tied to the fortunes of the agriculture sector.

The FMCG industry's growth rates have slowed to 1.5 per cent in value terms and 4 per cent in volume terms in 2003-04. From 1999 to 2003, the industry grew by just 4.4 per cent.

Harsh C Mariwala, chairman and managing director, Marico Industries, said, "The FMCG sector will gain from the trickle down effect of the major increase in social investments, but there could have been a greater leveraging of the relatively high growth in GDP, especially in agriculture, for demand push."