Mrs Bectors says the disruption caused by sub-Rs 5 pricing after GST changes is normalising, even as rising palm oil, packaging and logistics costs trigger a fresh inflation cycle across the FMCG sector
The pricing disruption that unsettled India’s biscuit market following the implementation of GST reforms appears to be easing, with major manufacturers gradually returning to the traditional Rs 5 price point, according to Mrs Bectors Food Specialities.
The development could bring greater stability to a category that witnessed unusual pricing behaviour over the past year, as some large players chose to retain Rs 4.50 packs even after industry-wide grammage and pricing adjustments.
Speaking during the company’s FY26 earnings call, Chief Executive Officer Manu Talwar said the pricing imbalance had affected growth in the domestic biscuits business during the second half of the year but was now correcting itself.
“One of the large players is still in transition, but they have started the transition and everybody is coming to the right coinage pricing,” Talwar said. According to the earnings call, the intense price-led competition that followed GST-related pack revisions may have been a temporary phenomenon rather than a structural shift in the market.
Inflation Pressure Returns
However, even as pricing discipline returns, the industry faces a new challenge: inflation. Unlike previous cost cycles driven largely by wheat and sugar, Mrs Bectors indicated that the latest inflationary pressures are emerging from palm oil, crude-linked packaging materials, logistics and labour costs.
Managing Director Anoop Bector said the company expects around 3 per cent cost inflation from a combination of packaging, palm oil, transportation and minimum wage increases across several states.
Notably, wheat, often viewed as a key risk factor for biscuit and bakery companies, is not currently a major concern.
The company said it has secured wheat supplies and does not expect significant disruption from crop quality issues reported in some parts of the country.
The shift is significant because it signals that FMCG cost pressures are increasingly being driven by global crude-linked inputs rather than agricultural commodities alone.
Mrs Bectors expects logistics inflation to become more visible in the coming quarters as higher fuel costs gradually move through supply chains.
Margin Protection Under Focus
The company said it has already initiated price increases and cost-efficiency measures to offset the expected inflationary impact. Management expects these actions to help protect margins despite rising input costs.
The comments also highlight the growing impact of geopolitical developments on consumer goods companies. Management repeatedly linked cost inflation, packaging prices and export logistics challenges to the ongoing conflict in West Asia.
Despite the inflationary backdrop, Mrs Bectors remains optimistic about growth in its biscuits business. The company expects low-to-mid-teen growth in the biscuits segment during FY27 after what management described as a relatively subdued FY26.
Domestic demand is stabilising, while export prospects are improving as tariff-related uncertainty in the United States begins to ease.
The company reported revenue of Rs 2,043.6 crore in FY26, crossing the Rs 2,000 crore milestone for the first time. Over the past four years, revenue has grown from Rs 988 crore to more than Rs 2,000 crore, reflecting a compound annual growth rate of 20 per cent.
Why It Matters
The return to Rs 5 biscuit packs signals that the post-GST pricing disruption may be ending, reducing the risk of an extended price war in one of India’s most competitive FMCG categories.
At the same time, Mrs Bectors’ commentary points to a broader trend emerging across consumer goods companies: inflation is returning, but this time it is being driven less by farm commodities and more by crude oil-linked inputs, packaging materials, logistics and wages.
For the FMCG sector, that could mean renewed pressure on margins and further calibrated price increases in the months ahead.
