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Industry sources said the uncalled for disruption in supply chain is mainly due to the overzealousness of a section of the police force who were allegedly stopping even the stockists of consumer products and godown staff from carrying out their basic duties.
Consumers are running out of packaged drinking water as well. There are long queues outside supermarkets as consumers scramble to stock up for the next few weeks, resulting in some taking advantage of the situation. A complex in Hyderabad, for instance, has put a Rs 500 upper limit for purchase of vegetables, and Rs 1,000 upper limit for general items.
Meat and seafood brand Licious has stopped operations in Delhi, even as consumers complained they’ve run out of pet food.
Distributors across the country have stopped operations and are waiting for a few days for things to settle down as there is confusion around labour movements. They, along with retailers, have 15-20 days worth of inventory. Companies, even those that have stopped production facilities, will have 20-25 days worth of inventory, senior industry executives said.
Godrej Consumer Products and Nestle India, in separate updates to the stock exchanges, said operations in some locations are scaled down or suspended.
An FMCG official said, “Supply chains are very complex. Whatever is produced in factories has to reach the markets. To produce essential goods, we need to source different raw materials. If the movement of goods does not happen, how will these products reach consumers?”
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Sources indicated that ITC’s production of food items like biscuit, packaged atta, noodles and other items like handwash, soaps and sanitisers has been affected nationally. It is learnt that ITC factories in Panchla and Uluberia in West Bengal, mainly for food products, have shut down since Monday evening.
An ITC spokesperson said, “We are in constant dialogue with relevant state government authorities to seek permission and clearance for the manufacture of essential products in select factories with bare minimum people. We are also seeking permission from local authorities for the transportation of essential products from the factories, warehouses as well as for distribution of products to the retail outlets.”
Emami director Aditya Agarwal told TOI, out of its three edible oil plants in the country, the Rajasthan plant was shut following the curfew.
“The West Bengal plant is working, but at 20% capacity. The problem is lack of labour force and transportation. Edible oil is not only needed for cooking but is the raw material for biscuit, cake, breads,” he added.
R S Sodhi, MD of the Gujarat Cooperative Milk Marketing Federation which makes Amul, said due to higher than usual demand for milk, the firm has been increased supplies to Mumbai by 15-20%, but there is a 20-25% decline in demand for products like ice cream and cheese because restaurants are shut.
“There are some disruptions in logistics. For instance, if an empty vehicle is not allowed to reach the godown, how will it go back filled with products? Moreover, to package any product, packaging material is required. This is usually outsourced. But packaging material is not an essential product. Companies usually hold an inventory of 15 days of packaging material,” said Sodhi.
For Metro Cash & Carry India, out of 27 stores in the country, 19 are operating with 15-20% staff. Its Mumbai store could not be opened on Wednesday as no one showed up for work. MD & CEO Arvind Mediratta said, “The local district magistrates or police commissioners are not allowing us to open the stores. The police officials are mistreating employees who venture out of their homes to come to the stores. Yesterday, there were quite a few cases of police beating up our employees though they are involved in critical services.” Kirana owners, on the other hand, are unable to visit Metro’s stores, resulting in shortage of dal and edible oils.
Bonn Group of Industries has faced many disruptions in transportation of its breads not only across states, but within Punjab itself. “We request the Punjab government to make special points in every city from where consumers or channel partners can pick up breads and other essentials. The state authority should also allow us to have a special vehicle zone in a few areas as well so that the essentials can reach near the consumer’s doorsteps,” said director Amrinder Singh.
Companies also blamed hoarding by consumers for goods disappearing faster than usual from retail shelves. “There has been a lot of panic buying in the last two weeks,” said Parle Products category head Mayank Shah “We are trying to supply as much as we can. The problem is talking to local authorities, the district collector or the magistrates to allow us to work, to say biscuit is a food item. One needs permission for the entire supply chain,” said Shah.
(Contributions by Namrata Singh in Mumbai, Udit Prasanna Mukherji in Kolkata, John Sarkar in New Delhi, Sujit John & Avik Das in Bengaluru)