P&G India hit by monetary policy: CFO

MUMBAI: Procter & Gamble, owner of the Pantene shampoo and Tide detergent brands, said its India business has slowed due to monetary policies that impacted liquidity in the market. “Slowing growth rates in India, largely as a result of some monetary policies, have created a bit of a liquidity squeeze, which is drying up inventory through the system,” Jon Moeller, chief financial officer, P&G, told investors on Thursday. “But we continue to grow well in India and build share.” In the previous fiscal, the world’s largest consumer products company expanded sales by 16%, helped by rural expansion and new product launches. In FY20, however, sales of fast-moving consumer goods (FMCG) have been impacted by slack rural demand and a liquidity squeeze that affected wholesale channels. Rural demand, which accounts for about a third of the market and had been outpacing urban sales, was also hit by lower farm incomes. In fact, growth in the FMCG sector slumped to 6.6% during the quarter ended December, compared to 15.7% a year ago, its slowest pace in at least three years. The management commentary from P&G is in line with what rival companies have said earlier. Unilever chief executive Alan Jope last month said measures to revive falling growth may need time to take effect and its India business could start to pick up in the second half of 2020. Consumer products firm Marico, in its quarterly update earlier this month, said December quarter consumption trends belied expectations of a revival in sentiment, forecast on the back of good monsoons and various government measures. More than a dozen categories within daily household, personal and food products expanded at a significantly slower pace from 2018 — growth rates in many segments nearly halved.

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