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BISCUIT INDUSTRY IN INDIA-

STATUS PAPER
Annual Growth
The biscuit industry in India witnessed annual
growth as below:-
2003-04 - 15%
2004-05 - 14%
2005-06 - 14%
2006-07 - 13%
2007-08 - 15%
2008-09 - 17%
(April – June)

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While the growth rate has been stagnating
during last 4 years, it has picked up
momentum during the 2007-08 and the first
quarter of 2008-09 mainly on account of
exemption from Central Excise Duty on
biscuits with MRP up to Rs.100/per kg, as per
Union Budget for 2007-08.

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Indian Biscuit Manufacturers’
Association (IBMA), instrumental in
obtaining the excise duty exemption,
estimates annual growth of around 20% in
the year 2008-09.

Growth in biscuit marketing has been

achieved also due to improvement in rural
market penetration.

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Annual Production:

The organized biscuit manufacturing

industry‘s annual production figures are
given below:

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(In Lakh Metric Tonnes)

2003-04 - 11.00
2004-05 - 12.54
2005-06 - 14.29
2006-07 - 16.14
2007-08 - 17.44

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Segments:

The organized and unorganized

sectors of the biscuit industry is in the
proportion Of 60%:40% ratio.

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• EXPORTS of Biscuit is estimated to be
around 15% of the annual production
during the year 2007-08.

• IMPORTS of biscuits into India has not

shown any significant growth during the
last two years and has not affected
production/sales by the Indian Biscuit
industry

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Rural-urban penetration of Biscuit:

Urban Market : 75% to 85%

Rural Market : 50% to 65%

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Marketing:

Wholesale and Retail marketing in the

Biscuit industry is carried out with a
network of C & F Agencies (for States
and specific Districts), Dealers /
Wholesalers and Retail shops.

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 HIKE IN COST OF PRDUCTION
Biscuit Industry especially the Small & Medium Sector,
consisting of around 150 units are facing erosion in their
profitability and competitive capability, due to :-

a) Steep hike in cost of production on account of

increase in prices of major raw materials, i.e. Wheat
Flour, Veg. Oil, Sugar, Milk, Packaging Materials, Fuel.
Wages,etc.Recent increase in prices of Petrol/Diesel
in May 2008 has further resulted n cost push.

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• The above rates are excluding VAT &
other Taxes as well as

• Cost escalation due to increase prices of

• Laminate, hike in prices of Petrol/ Diesel,

Revision of wages

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IMPACT OF ABOVE IN FINISHED
PRODUCTS
S.No Cost per KG Jan 08 May 08 Difference in In
Rs %age
1 Glucose 85 gm 31.08 31.73 0.65 2.09

2 Crunchy bite 150 30.18 32.40 2.22 7.36

gm
3 Golmol 150 gm 34.06 34.26 0.20 0.59

4 Butter 250 gm 41.59 43.82 2.23 5.36

5 2 in 1 75 gm 39.01 41.06 2.05 5.26

6 Milk Cream 75 gm 46.38 47.28 0.90 1.94

7 Marie 17 gm 40.37 41.21 0.84 2.08

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 Value Added Tax
Imposition of Value Added Tax (VAT) by
the State Governments @ 12.5%
compared to VAT at 4%/0% levied on
other similar food products has also
adversely affected biscuit industry.

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VALUE ADDED TAX

On behalf of the industry, IBMA has been pursing the issue

with the Chief Ministers/Finance Ministers of all States and
also with the Chairman of the Empowered Committee on
VAT, seeking reduction in the rate of VAT on biscuit to 4%.
IBMA delegations have already met Shri Asim Dasgupta,
Chairman, Empowered Committee on VAT, as well as Deputy
Chief Ministers & Finance Ministers of Bihar, Orissa,
Jharkhand, Punjab, Haryana,Delhi, Andhra Pradesh, and
oficials of Uttar Pradesh etc.While most of the State Ministers
have expressed their support of IBMA’s representation,
however the issue has not so far received favourable
consideration by the Empowered Committee on VAT.

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IBMA estimates annual growth in the
range of 25% and above in the event of
reduction in the rate of VAT on Biscuits to
4%.

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PER CAPITA CONSUMPTION of
Biscuits in the country is only 1.8 kg,
as compared to 2.5 kg to 5.5 kg in
South East Asian countries and
European countries, and 7.5 kg USA

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 Pattern of Biscuit Consumption(On Zonal
basis) in the country are as below:

Northern Zone - 25%

Western Zone - 23%
Southern Zone - 24%
East and North
East Zone - 28%
(Including N.East)
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• The per capita consumption as well as
pattern of consumption in the four regions,
as shown above, will also increase
considerably, in case the industry’s plea
for reduction in the rate of Value Added
Tax (VAT) from 12.5% to 4% is acceded
to.

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Main Categories of Biscuits are broadly as under:

Glucose, Marie. Sweet, Cream, & Milk

Popular Brands of Biscuits in the country are, Britannia,

Parle, Priyagold, Anmol, Sunfeast, Biskfarm, Dukes,
Cremica, Priya, Veeramani, Bonn, Bhagwati, Raja,
Champion,Sobisco,Madhabi, Nezone, Windsor,
Cookieman Ankit, Shangrila, Nalanda, etc.

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