23 April, 2018
Packaged coconut water is going to be more expensive this summer due to lower coconut production and higher taxes under the goods and services tax (GST) regime. Northern India gets its supply of coconuts from the south and the retail price of a 200-ml pack of tender coconut water could rise by 15-20% to Rs 38-40, making it costlier than soft drinks.
Coconut production in Tamil Nadu and Kerala — the country’s largest coconut-producing states — has dropped due to inadequate rains. The yield of the nut has gone down due to poor rains. This could hit sales as soft drinks costs for around Rs 25 per 200 ml.
Adding to the sector’s woes is GST. Earlier, tender coconut water was taxed at 5%. But now, while GST remains at the same rate for the unbranded packs, it has been fixed at 12% for the branded ones. Added to that is the GST of 18% for polypropylene (PP) bottles used for packing. Pre-GST, it used to be around 14.5%.
To tide over the situation, companies are adopting different measures. While some have cut production, others are absorbing the price increase to keep the edge in competition.