India’s COVID-19 lockdown: Coca-Cola, Nestle and more MNCs call for F&B manufacturing to be made ‘essential service’
India’s nationwide lockdown of some 1.3 billion people started at midnight on March 25 and was announced by Prime Minister Narendra Modi the evening of March 24 via a televised speech, barely four hours before the lockdown took effect, sending the country into a panic buying frenzy.
When the lockdown was announced, India had seen 536 COVID-19 cases and nine deaths – as of time of publishing, this number has already increased to 1,122 cases and 31 deaths.
"The entire country will be in lockdown, total lockdown,” Modi said.
“Seeing the present conditions, this lockdown will be for 21 days. This is to save India, save each citizen and save your family. Do not step outside your house. For 21 days, forget what is stepping outside.”
‘Essential services’ were purportedly going to continue functioning, but Modi did not detail what these would be in his speech. He later added on his Twitter that ‘Centre and State Governments will ensure all essentials are available’ and pleaded with the public to stop panic-buying, but with little effect.
The Ministry of Home Affairs attempted to clarify this later as well by issuing a set of guidelines – but details were also scarce.
With regard to food items, the guidelines stated that: “Shops, including ration shops (under PDS), dealing with food, groceries, fruits and vegetables, dairy and milk booths, meat and fish, animal fodder.
“However, district authorities may encourage and facilitate home delivery to minimise the movement of individuals outside their homes.”
No clarification was provided as to the scope of food businesses that would be allowed to continue to function apart from retailers, leaving food suppliers and manufacturers in the dfark.
F&B firms as ‘essential services’
This has prompted big food manufacturing firms such as Coca-Cola, Nestle, Britannia Industries, Mondelez, PepsiCo and more to submit letters to the government requesting for the F&B manufacturing sector to be deemed as an ‘essential service’ and thus exempted from restrictions under the lockdown in order to continue production.
The requests were made through three trade associations: The Federation of Indian Chambers of Commerce and Industry (FICCI), the US India Strategic Partnership Forum (USISPF) and the All India Foods Processors’ Association.
“To maintain regular supplies, it is necessary that this sector is not put under any work and movement restrictions. Along with the food and beverage sector, food ingredients companies should also be allowed to operate smoothly,” said the FICCI letter, warning that stopping these production activities would also impact the livelihoods of farmers and other produce suppliers.
The USISPF concurred with this, adding that: “Supply chains for food are highly integrated; disruption to any one part will have a ripple effect and the impact would be felt back to the agriculture sector.”
Britannia Industries Managing Director Varun Berry also warned that time was short to put these supply chains back into motion.
"If even one link in the supply chain is broken, the country could run of stocks of packaged food in the next seven to 10 days,” he told Economic Times.
"The supply chain includes suppliers of raw materials and packaging materials, food manufacturing factories, factory workers, transporters carrying materials and finished goods, depots, wholesalers, distributors, and their salesmen. Necessary permits need to be immediately issued to all of them.”
Coca-Cola India has also issued a separate statement on its website, saying that it had ‘temporarily suspended production’ at all manufacturing facilities, but was working to provide its ‘essential beverages’ to consumers.
Nestle India also posted its own statement online, saying that its office employees were working from home, and operational staff would focus on ‘social distancing and hygienic practices for the safety of the people’.
“As [Nestle] is in the manufacture and sale of food and beverage products, [we are] in discussion with the authorities to continue operations in the factories/ distribution centres where the operations has been suspended,” it added.
F&B start-ups also facing dire straits
Apart from the larger F&B firms, India is also home to a great many start-ups in the sector, and the lockdown is expected to have tremendous effect on their operations and even viability of survival.
In hopes of countering these, 50 Indian F&B entrepreneurs have formed what has been deemed the F&B Covid Emergency Group, and the consortium’s first move has been to create an online petition calling for ‘government support for small businesses in India’.
“The government must realise that the 50 entrepreneurs have employed more than 1,000 people, and with other entrepreneurs who have signed the petition, the number employed can be close to 10,000,” consortium member and CEO of nut butter firm Happy Jars Surabhi Talwar told Your Story.
“This crisis can destroy India’s young brands, which thrived on ecommerce and had their own supply chain.’’
The consortium listed five areas where they would ‘need support from the Indian Government’, namely: 1) Interest-free loans for MSMEs for six months; 2) Waiver/Delay on GST payments; 3) Invoice discounting by the government/large banks to support cash flow; 4) Helping to enfore 45-day payment commitments to MSMEs from clients; and 5) Cover 75% of staff salaries for staff during business closure.
Over 1,000 signatures have been obtained for the petition, but no official response from the government has been given as of time of publishing even though Minister for the Shipping Ministry of Micro, Small and Medium Enterprises Nitin Gadkari said at a public event that a 'major boost' was planned for the local MSME sector.
