May 11, 2021
Indian Ice cream Manufacturers’ Association seeks support from Union and State Government as the 2nd wave of the COVID-19 pandemic has hit the Ice Cream and Frozen Dessert Industries badly for the 2nd consecutive year. This 2nd wave has been the last straw on the camel’s back which has forced the ice cream players to look up to the government for help.
Initial days were hopeful, only later to see the disappearance of ice-creams from the bowls of consumers. For the second consecutive year in a row, the indifference of the government towards the ice cream industry and ice cream products is quite noticeable. Their disinterest to boost the sector has led to a loss of market sentiment for ice creams and frozen desserts during lockdowns of shops and janta curfews. Was not this a better time to sit back, relax, and have chilled delicacies with family?
Having a good herd of almost 12,000 organized and unorganized, small and large ice cream manufacturers are in serious delirium of financial difficulties, bringing them on the brim of total shut down. Researches studies have indicated that people when at home have greater cravings for sweets than while working in the office.
Though spreading goodness, happy moments, chill treat in heat of summers, and immunity to the people with nuts, calcium, protein….ice cream is judged with myths and fears of catching throat infection that being the prime symptoms of COVID-19.
Of late, the RBI policy that has restructured loans rather than extending the moratorium has proven as a little help to the ice cream industry, for the already ailing industry.
In India, Gujarat sells the highest volume of ice cream, followed by Maharashtra, Delhi, Rajasthan, Karnataka, and other states. The most significant share of losses to the ice cream industry and its ancillary industries are also in the states suffering the most from the COVID-19 pandemic. However, Sudhir Shah, President of IICMA, said, “The government can bring back a glimmer of hope by accepting two of our most logical demands: the reduction of GST, which we have been pitching for almost a year now, and a provision for fund assistance, either as interest-free or direct cash assistance”.
IICMA further cited that, since last year, the Association is trying and requesting the government to reduce the GST of ice cream from 18% slab to 12% fruitlessly. With the reduction to GST, the association is also pushing for a transition of the industry to the composition scheme. Getting ice cream under 12% GST will keep it at par with dairy industries that have comparably lower tax slabs ranging from nil to 5% or 12% GST. In comparison, ice cream is under the 18% GST slab tagged as a luxury item. It is important to note that the ice cream industry thrives on raw materials from dairy farmers, sugar from sugarcane farmers, nuts from agricultural farmers, accounting for 5% of India’s GDP. The industry’s poor performance might spill over in the form of low demands for milk, butter, and cream. This could affect the livelihoods of farmers and people in the dairy and related food processing industries. This is a vicious circle that needs quick attention of the authorities.
Such losses keep happening and are not new for the company, what’s new is the declining feelings for the frozen dessert in the consumer market. “None of our requests have been met till now. The government could do a lot to boost the sector during such pall of gloom in the economy,” said Ashish A. Nahar, Director-Fun India dairy and Secretary of IICMA. “March and April have already passed. We have just one more month to prove our point to the government. If not now, then we would not be able to recover even a part of our losses over the rest of the year”, he added. “Ice cream is sold mainly during the peak selling season of March to May. And with the current lockdown in progress, we have lost all hope,” he added further.
“All state governments should support the ice cream industry as it contributes immensely in generating local employment [direct and indirect]. Ice cream, like dairy, should be brought under essential goods as done by the Government of Karnataka during the lockdown last year. We are also seeking a deferral of electricity bill payments as sales have taken a huge hit across the country”, said Pradeep G Pai, MD Hangyo Ice cream (Karnataka) and Treasurer of IICMA.
IICMA is somehow bearing the impact of the crisis brought by the pandemic and requests the Minister of Finance to take immediate and decisive action in the matter concern and to keep the industry afloat. This governmental influence might provide the required thrust to the ice cream industry to go for a customer-friendly overhaul of its products. This intervention might also help companies related to other frozen and semi-frozen products and organic flavoured yoghurts as well.