The Ministry of Consumer Affairs, Food & Public Distribution Government issued a notification exempting wholesalers and big chain retailers of food from the current stock limit order, with immediate effect.
This will allow them to keep various varieties and brands of edible oils, which they were unable to keep due to a stock control order which was in force.
“The stock limit for wholesalers and chain store retailers did not account for large chain stores that have come up in the country over these years. This is a welcome move by the government as it recognises that the stocking limits have to be seen separately for chain store retailers and hypermarkets,” said Kumar Rajagopalan, CEO, Retailers Association of India (RAI), which had taken up the issue with the Government.
Wholesalers and chain store retailers were facing problems in daily operations as the limits specified were insufficient to meet demand and daily replenishment of shelf stocks in city limits was challenging, RAI said in a statement.
“This move will not only smoothen supply chain issues but will also increase the market size as wholesalers and chain store retailers will now be able to add more varieties and brands of edible oils,” the statement said.
The Government of India had imposed stock limits on oil and oilseeds to cool down the domestic prices of edible oils. The high volatility of prices was leading to hoarding, profiteering and black marketing. The stock limits were to be in force till 31 December 2022. However, the limits were based on those imposed in the year 2008—a time when big chain food retailers either did not exist or played a major role as compared to today. And therefore were not relevant in today’s scenario.
The Department decided to review the stock limit given the challenges food retailers were facing concerning stocking and restocking and the decline in edible oil prices in international as well as domestic markets.