ECONOMY

Parle Agro Seeks Six-Month Extension To Implement Plastic Straw Ban

Parle Agro, a beverage company which owns popular brands such as Frooti and Appy, has urged the government to extend the deadline to implement the ban on plastic straws for the next six months.

The government’s ban on single-use plastics, including plastic straw, is going to be effective from July 1, 2022.

Terming it as a “hasty ban”, Parle Agro said it will “negatively impact” overall businesses of the industry players in the FMCG (Fast Moving Consumer Goods) and beverage segment.

“While Parle Agro endorses the government-led ban on the use of plastic straws, our plea is to postpone the implementation of the injunction by six months,” the company said in a statement.

According to the company, India produces and sells around 6 billion packs of paper-based beverage cartons with integrated plastic straws per annum.

The available capacity to provide alternatives like biodegradable PLA straws or paper straws by a local Indian manufacturer is 1.3 million units per day, which is much less than the actual requirement.

“Packaging companies will need to invest in the right infrastructure to accommodate the changes which will require time to ensure the alternative is appropriate and cost-effective, especially during inflationary times,” the statement said, adding, “Currently, there is no local manufacturer who can accommodate the demand.”

Also, the imported straws will be 6 to 8 times more expensive, making the cost of the product unaffordable, particularly products that are targeted at urban and rural markets.

“For Parle Agro, 50% of the company’s turnover is from rural markets as its products are strategically priced to cater to consumers across every corner of India. The increase in the cost of the product will lead to a fall in demand and affect sales significantly,” it said.

To replace plastic straws, companies need 6-8 months to make the necessary changes in technology and sourcing, and ensure a smooth transition to environment-friendly options like paper or PLA straws.

“We support the noble intention of the government to ban the use of plastic straws. To implement the changes, we need a postponement of the ban by six months which will allow packaging companies in building the right infrastructure needed to source locally,” said Parle Agro CEO Schauna Chauhan.

The percentage increase in cost from plastic to plant-based PLA straw is approximately 122%, but if companies were to import the straws, the cost goes up by 259% and 278% for PLA and paper straws, respectively.

“Hence the industry will require time until local manufacturing capabilities are commercialised, all of which are currently underway,” it said.

Parle Agro, the Rs 7,000-crore firm, has 84 manufacturing facilities and operates in fruit juice based still and sparkling drinks, packaged drinking water and dairy-based beverages under various brands such as Frooti, Appy, Appy Fizz, B-Fizz, SMOODH, Bailley, Bailley Soda Frio, Dhishoom and Bombay 99.



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