Calling it an “early ban”, Parle Agro said it will “negatively impact” the entire business of industry players in the FMCG (Fast Moving Consumer Goods) and beverage segment.
“While Parle Agro endorses the government’s ban on the use of plastic straws, our plea is to postpone implementation of the injunction for six months,” the company said in a statement.
According to the company, India produces and sells about 6 billion paper beverage cartons with integrated plastic straws per year.
The capacity available to supply alternatives such as biodegradable PLA straws or paper straws by a local Indian manufacturer is 1.3 million units per day, which is far below the actual needs.
“Packaging companies will need to invest in the right infrastructure to adapt to the changes which will take time to ensure the alternative is appropriate and profitable, particularly in times of inflation,” the statement said, adding: “Currently, there is no local manufacturer that can meet the demand.”
Also, imported straws will be 6 to 8 times more expensive, making the cost of the product unaffordable, especially products intended for urban and rural markets.
“For Parle Agro, 50% of the company’s revenue comes from rural markets, as its products are strategically priced to meet the needs of consumers in all corners of India. of the product will lead to lower demand and affect sales significantly,” he said.
To replace plastic straws, companies need 6-8 months to make the necessary changes in technology and supply, and ensure a smooth transition to environmentally friendly options like paper straws or in PLA.
“We support the government’s noble intention to ban the use of plastic straws. To implement the changes, we need a ban delay for six months, which will allow packaging companies to build the right infrastructure needed to source locally,” Parle said. Schauna Chauhan, CEO of Agro.
The percentage increase in cost from plastic to plant-based PLA straw is around 122%, but if companies were to import the straws, the cost would increase by 259% and 278% for PLA straws and in paper, respectively.
“Therefore, the industry will need time to commercialize local manufacturing capabilities, all of which are currently underway,” he said.
Parle Agro, the Rs 7,000 crore business, has 84 manufacturing facilities and operates in still and sparkling fruit juice drinks, packaged drinking water and dairy drinks under various brands such as Frooti, Appy, Appy Fizz, B-Fizz, SMOODH, Bailley, Bailley Soda Frio, Dhishoom and Bombay 99.