Fraser& Neave will pass on all savings from the GST implementation to its distributors and trade customers in adherence of the Price Control and Anti-Profiteering Act.
F&N chief executive officer, Lim Yew Hoe said the group will transfer any savings from the new GST regime and elimination of government sales tax to its distributors and trade customers. Lim, however reiterated that while its distributors and trade customers could potentially enjoy lower prices, F&N does not control the price of its products at the retail end.
“We will share the savings with our trade customers and they in turn determine the price at the retail end. The F&N Group is conscious and appreciative that its products are a staple in the preparation of beverages, food and confectionary in everyday Malaysian life. Our move to share the cost savings is reflective of our highest appreciation to our customers and consumers for their support of our brand over the last 131 years,” said Lim.
He added that the group did not envisage much savings from its dairies division as canned milk products were currently not subjected to government sales tax. For the year ended 30 September 2014, the F&N recorded an 8.9% growth in revenue to RM3.82 billion.
Commenting on the implementation of the GST in April, Lim added that the group was ready and would run simulation exercises by end January to ensure a seamless transition into the new tax regime. The company is said to be working closely with trade partners and the various vendors in our supply chain in preparation for the GST implementation.
While assessing the readiness of the group’s soft drinks and dairies divisions’ systems and processes for the GST implementation, F&N also said it was exploring opportunities to enhance synergies and efficiencies especially the route-to-market.
“Our long-term objective is to ensure that our distribution and logistics system is able to drive operational and cost efficiencies while optimising the Group’s environmental footprint […] While prices are currently lower than traditional levels, we will remain vigilant against any sudden surge and respond accordingly to the business dynamic and market environment, " he added.