Smuggled goods perturb FMCG sector

Companies say they pose threat to profits, forex reserves

LAHORE:

The fast moving consumer goods (FMCG) companies in Pakistan have stated that smuggled or illegally imported products from Iran were posing significant threat to their profits and sales.

They highlighted that such goods cost half as much as locally available ones and their availability was increasing on the back of climbing inflation reading.

To highlight the issue, the Pakistan Dairy Association (PDA) penned letters to the concerned authorities including provincial food authorities, Federal Board of Revenue and Pakistan Customs.

The authority remarked that items such as Iranian dairy creams, liquid milk and flavored milk were being sold in Pakistan through parallel trade routes.

“In addition to causing heavy losses to the national exchequer, these products are also violating the labelling requirements, applicable quality and nutritional standards of provincial and federal food departments,” it added.

The letter noted that despite the legal requirement to check imported processed food products, unregulated and non-compliant dairy items were widely available in the local markets which could be detrimental to the health of Pakistanis.

This disparity in enforcement of law is not only unfair to the local dairy industry but also a threat to the public at large, the PDA stated.

Pointing towards legal issues in design infringement, labelling anomalies, import irregularities, food safety risk and violation of SRO 237, it requested the government to ensure compliance of imported dairy products as per the applicable standards of locally regulated dairy products.

Any product, whether imported or locally manufactured, must meet the minimum applicable standards for consumer health as well as follow fair business practices, the letter added.

According to a recent report from IPSOS, illicit trade in just five sectors was dealing a blow worth Rs310 billion to Pakistan’s total annual tax collection. It estimated the shadow economy of the country at around 40% of GDP and tax evasion as a percentage of GDP at 6%.

 

Published in The Express Tribune, February 22^nd, 2022.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.