Coronavirus outbreak: FMCG firms limit operations only to essential items; Amazon, Walmart to stop non-essential sales

As various state governments issue notifications, the FMCG firms are in discussions with them to ensure that manufacture and distribution of essential products are streamlined

Published: Mar 25, 2020
SM_FMCG_shutterstock_1288448881 Image: Shutterstock

ITC, Nestle and Dabur on Tuesday said they are producing only the essential items at their manufacturing units amid the lockdown to prevent spread of coronavirus.

Amazon.com Inc's India unit on Tuesday said it will halt orders for non-essential products in India to prioritize customers' critical needs at a time when much of the country is under lockdown to prevent the spread of coronavirus.

The fast-moving consumer goods (FMCG) sector, which is producing beverages and foods as well as essential personal hygiene products such as hand wash, soaps and sanitisers that are needed to fight COVID-19, is in talks with local authorities to resume operations at some their units, PTI said.

Like others, FMCG makers have adopted 'Work from Home' for all employees at their head and regional offices to contain the spread of COVID-19, the disease caused by coronavirus.

According to ITC, it is "extremely critical" to ensure adoption of precautionary measures during this period, but it is also important, that during such challenging times, "essential products are made available to consumers in a safe and sustainable manner across the length and breadth of the country through continuity of supply".

"As various state governments issue notifications, we are in discussions with them to ensure that manufacture and distribution of essential products are streamlined," said an ITC spokesperson.

ITC, which manufactures personal hygiene products like hand wash, soaps and sanitisers under Savlon brand and food items under brands such as Aashirvad, is "operational with bare minimum people" as these are essential products, said the Kolkata-headquartered company.

A total of 32 states and Union territories had already declared complete lockdown in the wake of the coronavirus outbreak. From midnight, the lockdown will be imposed across the nation.

Following this, several companies have halted their manufacturing operations till 31 March.

Nestle India, maker of Maggi noodles, Nescafe coffee, Cereal for infants and KitKat chocolate, which operates eight factories in the country, have either suspended operations or scaled down the operations at its manufacturing units.

"In view of the lockdown in many of the states and union territories across the country, the operations in some of the locations (manufacturing, distribution centres/ warehouses, offices, suppliers) are scaled down or suspended," said Nestle in a regulatory filing.

However, the company said as it is "in the manufacture and sale of food and beverage products, the company is in discussion with the authorities to continue operations in the factories/ distribution centres where the operations has been suspended."

Beverages major Coca-Cola India has also suspended its manufacturing operations and is only producing "essential beverages", such as water, juices, tea and coffee, at its manufacturing facilities in small number complying to the local government's regulations.

"In compliance with the government directive, we at the Coca-Cola system in India have temporarily suspended production at our manufacturing facilities," said Coca-Cola India.

With respect to the essential beverages, the company is "operating our manufacturing facilities in very small number", it said.

Varun Beverages, PepsiCo India's bottling partner, has also suspended manufacturing operation.

Home-grown FMCG major Dabur India has also suspended its manufacturing operations, excluding essential items such as Ayurvedic medicines, Chyawanprash, hand sanitisers and hand wash.

"We have temporarily suspended production at our manufacturing units till March 31, 2020, except for essential products such as Ayurvedic medicines, Chyawanprash, hand sanitisers and hand wash in the larger public interest," said Dabur India in a statement.

Over the financial impact, Dabur said, "The situation is still dynamic and uncertain and it is difficult to evaluate or quantify the impact at this point of time. A lot will depend on the stabilisation of the overall scenario arising from the COVID-19 pandemic."

Similarly, Nestle India said, "Impact on the operations of the company cannot be assessed at this point."

Amazon.com Inc's India unit on Tuesday said it will halt orders for non-essential products in India to prioritize customers' critical needs at a time when much of the country is under lockdown to prevent the spread of coronavirus.

Walmart Inc's Flipkart has suspended services, a notice on the Indian e-commerce firm's website said on Wednesday, as India began a 21-day lockdown to fight the spread of the coronavirus pandemic, Reuters said.

Flipkart's move came after rival Amazon India said on Tuesday it will halt orders for non-essential products in India to prioritize customers' critical needs, and focus on supplying essentials.

The decision by the Seattle-based Amazon's India unit follows a similar move to stop shipping non-essential products to consumers in Italy and France, countries hit hard by the virus outbreak.

Amazon India will prioritize the sale and delivery of household staples, packaged foods, healthcare, hygiene and personal safety products, the company said in a blog post.

The company said it was seeing a surge in demand for essential good and services, adding that it was giving customers the option to cancel undelivered orders for lower-priority products and get refunds.

Amazon did not give a timeline for the resumption of normal operations.

Walmart Inc's Flipkart, Amazon's main rival in India, said it was extending delivery timelines in the light of disruptions in several states.

To enable millions of Indians working from home to access household supplies, the federal technology ministry on Tuesday advised state governments to allow e-commerce services to operate, especially with respect to essential items.

The government's lockdown of several cities has disrupted deliveries by e-commerce firms and online grocers.

According to data from the health ministry, over 500 coronavirus cases have been reported in India so far.

--With agency inputs

Original Source: https://www.firstpost.com/business/coronavirus-outbreak-fmcg-firms-limit-operations-only-to-essential-items-amazon-walmart-to-stop-non-essential-sales-8186921.html

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