India’ FMCG sector has lost Rs 3,840 crore last month, thanks to demonetization

Aimed at curbing black money, demonetization has taken a toll on India’s FMCG sector. After a good monsoon this year, traders believed that the winter would be better than ever. However Modi’s decision to demonetize old notes of higher denomination has dipped the sales by 1-1.5% or Rs 3,840 crore in November, as compared to October.

"While 1¬1.5% net impact of demonetisation does not look huge, considering the size of the FMCG industry at Rs 2.56 lakh crore, this is a large drop in terms of absolute value," said Nielsen.

Data revealed also shows that retailers across the country are stocking less goods that earlier.

Purchase of personal care items such as toilet soaps, toothpaste and shampoo has seen the steepest decline by retailers. The fall in off-take is driven by urban India (-3.1% Nov vs Oct), while rural India has managed to stay flat at 0.4% mainly due to smaller packs, smaller currency transactions and a flourishing barter system. However chemists were relieved of this because they were allowed to take old notes and grew better in rural India.