FMCG, packaged food companies scramble for local permissions for units, raw materials and transportation

As India grappled with the first day of the complete lockdown, packaged food and FMCG companies scrambled to get clearances from district- and State-level administrations for production and transportation of essential products.

Despite orders from both the Ministry of Commerce (Department for Promotion of Industry and Internal Trade - DPIIT) and the Ministry of Home Affairs, in the past two days, on keeping production and transportation of essential goods open under strictest safety and hygiene guidelines, there is confusion on the ground as key FMCG players stated they are shutting or scaling down operation of plants.

Lack of clarity

A senior executive with a leading packaged food company said: “Despite various government orders, local authorities in different regions are interpreting these guidelines differently. I believe different departments and ministries of the Central government need to come together to ensure a uniform set of guidelines are issued for State- and district-level authorities.”

Another senior executive stated that the Centre needs to further clarify what constitutes essential items.

A spokesperson for ITC said: “While the lockdown is a welcome step to contain the spread of the virus, it would be critical during these challenging times to ensure the production and supply chain for essential items are not disrupted so that items like food and hygiene products can reach consumers across the country. We are in constant dialogue with relevant State government authorities to seek permission and clearance for the manufacture of essential products in select factories with bare minimum people.”

The spokesperson added that the company is also seeking permission from local authorities for the transportation of essential products from factories and warehouses, as well as for the distribution of products to retail outlets. “Truck movement — both inter-S̥tate and local — has been currently impacted. It will take a few days for the entire ecosystem and processes to fall in place for movement of essential goods.”

Appeals

Many industry associations have sent letters to various ministries emphasising the need to ensure factories that make essential goods are not put under work and movement restrictions as they have reduced workforce by 50 per cent to maintain safety of staff.

Subodh Jindal, President, All India Food Processors’ Association, said: “In our interaction with various government officials, we have urged them to allow food processing units to operate, and to provide passes for factory and supply-chain employees to travel for work. We also need permits for local goods vehicles to carry raw and packaging materials, and food products with supply invoices and e-way bills.”

Several State governments have begun issuing guidelines for the lockdown, but local-level issues remain.

A spokesperson for Mars Wrigley India said: “In these times of need, consumers need easy access to food supply. Logistics have certainly been an issue for essential raw materials for the food sector, along with packaging and inter-State transportation. It is the need of the hour for clear guidelines to emerge on the movement of all food items... to prevent shortages and price fluctuations, and to maintain regular supply to consumers.”

Amrinder Singh, Director, Bonn Group of Industries, which makes breads and biscuits, said the company was facing problems in transportation of its products across North India. “There have been incidences of trucks being stopped by cops at various checkpoints, and there is dearth of raw material. There are restrictions on movement of our workers. We are asking local authorities to assign special vehicles and set up special points for sale of essential goods.”

Last-leg issues

Meanwhile, challenges at the retail end continue with e-commerce platforms and retail chains, too, trying to keep up with demand.

Albinder Dhindsa, co-founder and CEO of online grocery delivery platform Grofers, said that the company is taking every measure to ensure delivery of essential supplies. “Under the directive of the Ministry of Consumer Affairs, grocery delivery is acknowledged as an essential services. Over the last few days, we faced a few hiccups in our operations which led to a backlog of around four lakh orders. However, the local authorities are helping us resume our operations. We are closely working with them, and with their support, we will soon start accepting orders on our platform.”

By Wednesday evening, several city police departments such as that of Delhi and Gurugram said they had held meetings with e-commerce companies, and will ensure movement of delivery personnels.

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