Retail in Asia

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Indian FMCG firms’ royalty payments remain flat

Royalty as a percentage of sales for some key listed Indian arms of foreign consumer goods companies was actually flat in the past three years, shows an analysis by the Business Standard Research Bureau.

The spectre of royalty has dogged boardrooms of fast moving consumer goods (FMCG) companies, with foreign ones frequently charged with depriving minority shareholders of dividend by sucking out funds through payment for usage of their brands and trademarks. The analysis sought to test the extent of the occurrence. It found Hindustan Unilever (HUL), Nestle India, Procter & Gamble Hygiene & Healthcare and GSK Consumer Healthcare had a marginal drop in their royalty payouts as a percentage of sales in the past two years, in contrast to the charge that their parents are quick to seek their pound of flesh when the opportunity presents itself.