FMCG giants foam up soap & shampoo prices, blame costs

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Having played ‘who blinks first?’ for a long time, FMCG majors are finally opting to hike prices to account for rising raw material costs. For starters, Godrej Consumer Products Ltd (GCPL) is hiking the prices of toilet-soap brands Cinthol and Godrej No.1 in May 2008.

Following suit, Dabur India is planning to increase prices of its shampoo range in the next two months. Another FMCG major CavinKare Private Ltd has increased the price-tag of shampoo brands Nyle and Meera in April. According to industry sources, Wipro Consumer Care is also planning to revise its pricing strategy to pump up volumes.

On the company's revised pricing strategy, Sunil Duggal, chief executive officer, Dabur India, said: “We are looking at price-hikes for our shampoo brands. However, we have no plans to increase the price of our soaps this year.”

On the rational behind GCPL's price-hikes, HK Press, executive director, GPCL, said: “It was necessary to increase the prices of our soaps due to cost and inflationary pressures. We plan to increase prices of Cinthol and Godrej No.1 by 6 % within a fortnight.”

According to CK Ranganathan, chairman and managing director, CavinKare, the company has opted for a price- hike as the cost of raw materials was shooting up day-by-day.“We are hiking the price by of shampoo brands Nyle and Meera by 7%. There is no choice. We have to hike the price to counter rising raw material costs,” he said.

Even as Dabur India and Cavikcare increase prices of their shampoo brands, Hindustan Unilever Ltd (HUL) has reduced prices of some of its toilet-soap brands which include Lux and Hamam. According to Akhil Kejriwal, an analyst with Enam Securities, “HUL has registered a low-volume growth in the toilet- soaps category in FY07. The company has now brought down the prices of Lux and Hamam on par with upcoming competitors’ brands.”