After the GST Council put mayonnaise and salad dressings in the 12 per cent tax slab, from the earlier 18 per cent, some condiment companies have decided to reduce prices. The reduction on prices on mayonnaise and salad dressing products is in the range of 8-10 per cent.

Oliver Mirza, MD & CEO, Dr. Oetker India, said, “In line with the revised GST rates and input tax benefits announced by the GST Council, we have passed on the GST benefit to our consumers. The rates on the FunFoods range of mayonnaise and sandwich spreads have been revised and consumers can now avail the benefits of up to 8 per cent on the existing MRP.”

The company said that it started manufacturing products with revised MRP from December 1 and that the first batch has already hit the market.

While mayonnaise is known to outsell ketchup in markets such as the US, in India ketchup is a much bigger segment compared to mayonnaise. As per industry estimates, mayonnaise segment is expected to touch the ₹1,000-crore mark in terms of retail sales value growing at CAGR of 22-23 per cent.

Sanjey Bajoria, Managing Director at Bajoria Foods, which distributes and markets the international mayonnaise brand American Garden in India, also confirmed reduction in prices. “We have reduced prices in the range of 8-10 per cent across mayonnaise and salad dressing products. The new stocks with the revised MRP are now available on the shelves. We have also been affixing stickers to inform consumers about the new prices on old stocks,” he said.

In June, the GST Council had put ketchup at 12 per cent tax slab, while mayonnaise was at 18 per cent. This had disappointed some players as they urged the government to put all condiments especially ketchup and mayonnaise in the same tax bracket for a level playing field.

But, whether all brands will follow suit remains to be seen. A senior executive of a packaged food company added, “When the GST tax rate on mayonnaise was increased to 18 per cent, we did not hike prices but absorbed the costs. Now the reduction in the tax rate has come when the raw material prices have shot up considerably. The segment is highly competitive and operates on thin margins. Companies have also been running discount schemes on mayonnaise through the year. ”

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