Last updated: 07 Nov, 2020 | 09:38 am
While the pandemic has hurt businesses across sectors, FMCG focussed businesses such as HUL and Nestle have posted decent numbers in the quarter. In fact, food and other FMCG essential services witnessed panic buying and hoarding during the early onset of the pandemic.
However, in case of ITC, ‘sin taxes’ continue to remain a key overhang, given that Cigarettes business is a major segment in terms of revenue and profits. If the government is unable to meet its revenue targets through taxation, it may need to continue to lean on taxing “sin goods”, such as cigarettes. Wide availability of smuggled cigarettes continues despite deterrent actions by concerned authorities; remains a key challenge for the legal cigarette industry which has witnessed significant reduction in volumes in recent years. The company has been trying to diversify away from tobacco into FMCG and its other businesses.