According to Dabur Chairman Mohit Burman, general trade’s liquidity issues are taking a toll on Fast-Moving Consumer Goods (FMCG) companies. The chairman expressed concerns over the industry’s working capital management, citing delays in payments from wholesalers and retailers. Burman emphasized that the situation is more challenging for companies with higher working capital requirements, as they struggle to manage cash flows and maintain inventories.
The liquidity crisis has led to inventory piling up, resulting in lower sales and higher costs. FMCG companies are being forced to maintain larger buffer stocks to mitigate the risk of stockouts, further straining their cash reserves. The chairman attributed the issue to a combination of factors, including delayed payments, high costs, and a shortage of skilled workers.
Burman highlighted that the situation is affecting even the largest players in the industry, as they try to maintain their market share and growth momentum. To address the issue, companies are exploring alternative payment methods, such as e-commerce and digital payment platforms, to reduce reliance on traditional trade channels. However, the liquidity crisis remains a significant challenge for the FMCG sector, and Burman emphasized the need for a sustainable solution to overcome the current difficulties.