Budget relief for cereal makers

BUDGET IMPACT

Due to an excise reduction from 16 per cent to 8 per cent for breakfast cereals declared in the Union Budget 2008, breakfast cereals maker Kellogg's India will get a breather from high input costs.

According to the company, it has not effected a price increase of its products since 2005 despite the rise in input costs such as commodity prices, fuel and power costs.

"The proposed excise reduction will help alleviate the cost pressures and ensure that we continue to deliver value to consumers despite inflation and increase in input costs," said Anupam Dutta, managing director, Kellogg's India.

The company, however, did not give any indication of any reduction in the market retail price (MRP) of its products.

The breakfast cereal market has doubled in the past four years and is pegged at Rs 250 crore. Experts said that its growth can be attributed to the connection it made with consumers as a healthy breakfast option.

The latest offering launched by Kellogg's is called Special K, which is formulated as a fat-free cereal designed to meet the specific needs of women.