Free grinders, mixies in Tamil Nadu polls leave traders apprehensive

Last Updated: Sun, Mar 27, 2011 07:16 hrs

Chennai: Free wet grinders and mixies to women voters in Tamil Nadu! This grand poll promise by the major political parties in the southern state has invited a mixed reaction from the manufacturers and retailers of such kitchen appliances in the land of idlis and dosas.

The ruling DMK and opposition AIADMK have promised free wet grinders, mixies, fans and laptops to the voters if voted to power.

Tamil Nadu is a major market for wet grinders and mixies. While the AIADMK has promised voters a wet grinder, mixie and fan, the DMK has promised a wet grinder or a mixie.

Wet grinder manufacturers in Coimbatore, located around 500 km from here, have in general welcomed the poll freebies. Wet grinders are essential to grind the batter, made of rice and urad dal, for dosas and idlis.

'It is a positive development for the industry. It will take some time for the new government to proceed on the matter,' B. Shakthi, president of the Coimbatore Wet Grinder Manufacturers Association (COWMA), told IANS.

There are around 200 units making wet grinders in Coimbatore - making around 100,000 units per month. There are around 500 units supplying components to wet grinder makers. The industry has a direct workforce of around 20,000.

Unlike many other consumer durables that are invented abroad, the wet grinder is designed, developed and mainly manufactured in Coimbatore.

'Noting the poll promises of the two parties to be a positive development, the industry will wait and see as to how the government would procure the wet grinders,' N. Rajan Babu, president of COWMA Cluster Association, told IANS.

According to industry players, the government and industry could benefit if the order is given to units that are part of the cluster.

'The cluster members can form a cooperative and then bid for the government tender. If it gets the order then the volume could be divided amongst the member units. The industries can invest in modernisation and workforce if backed by good order book,' said a manufacturer.

According to manufacturers, given the volumes at stake - around 17 million units of free colour television were sourced by the Tamil Nadu government in 2006 - the industry can offer a two-litre table-top wet grinder for Rs.2,200.

The two-litre table-top model is the fast- moving product at the retail end, they said.

Some manufacturers however are of the view that the poll promise if implemented will kill the wet grinder industry in five years' time.

'People may have two television sets and refrigerators at home, but not two grinders or mixies,' a wet grinder manufacturer told IANS preferring anonymity.

'I have given credit period to my dealers and have also funded them. Now it will be difficult to get back my money from them. Prospective buyers will postpone their purchase decision in view of the freebies,' he added.

Welcoming the poll freebies, Vijay Srinivasan, marketing director at Maya Appliances, said: 'The free mixies will actually help the market grow. Users will soon upgrade themselves to brands like our Preethi Mixies. As such we will not be impacted.'

He said the mixie market in Tamil Nadu is estimated at around one million units per annum, 60-65 percent of which is accounted for by units in the price range of Rs.2,500-plus. The balance market consists of mixies priced below Rs.2,500.

He agreed that a good quality mixie can be supplied at Rs.1,000.

The likely total outlay on these three products would be - wet grinder Rs.2,200, mixie Rs.1,000 and fan Rs.700 per unit. For all three, if 17 million units are sourced, the cost will work out to around Rs.66.30 billion.

The wet grinder manufacturers agree with the retailers that the government move would kill the retail trade in wet grinders.

Citing the free colour television scheme of the ruling DMK, a consumer durable retailer preferring anonymity told IANS: 'The scheme effectively killed the portable television segment in the state at the retail level. Similarly the household wet grinders and mixies would face a similar fate.'

According to him, the bulk free scheme will also affect those players in the supply chain/logistics segment.

In 2006 the DMK party promised free colour televisions to the poor in the state and later extended the scheme to all ration card holders. The government procured around 17 million television sets at an outlay of Rs.40 billion.

At the retail end, the scheme wiped out the market for portable television as the sets were sold for Rs.500-Rs.1,500 by the beneficiaries.

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