FMCG majors mull another round of price hikes

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Mumbai, Jul 4: You’ll have to shell out more for your toilet soap and detergents now, and even for your daily cup of tea, since it’s time for another round of price hike in the Rs 82,000-crore Indian fast moving consumer goods (FMCG) industry. As FMCG major Hindustan Unilever Ltd (HUL) hikes the price of its detergent brand Surf Blue, other FMCG majors are mulling price hikes in their respective brands this month, according to retailers.

“With rising input costs, FMCG companies are revising their prices almost every day. We certainly expect more price hikes in the next two months,” said a leading retailer in the Mumbai suburbs.

Industry analysts point out the FMCG industry is seeing continued cost pressure from inflation and input costs in 2008.

“The price hike is inevitable. HUL has recently hiked the price of Surf Blue from Rs 132 (per kilo) to Rs 140,” said an industry analyst based in Mumbai.

HUL’s arch-rival Procter & Gamble India is not sitting quiet either. Bharat Patel, chairman & managing director of P&G India, told FE: “We will be hiking the prices of our brands as the cost of raw materials is going up dramatically. We will increase prices based on market conditions.” According to Sumeet Vohra, marketing director, P&G, inflation is a business reality and P&G is in the process of evaluating input costs and other relevant factors.

Yet another FMCG major, CavinKare, is gearing up for a price hike to account for rising input costs. “Within a fortnight, we will increase the prices of our main brands by 5 to 10%,” said CK Ranganathan, managing director of CavinKare.

In sync with other players, Duncans Tea is in the process of raising the prices of its tea brands this month. “Our price increase will be from Rs 4 to 8 (per kilo) for our diverse brands,” said MC Appiah, chief operating officer, Duncans Tea.

Even as HUL is revising the price of its flagship toilet soap brand Lux, competitor Godrej Consumer Products Ltd (GCPL) is planning to hike prices of its soaps within a month. “We plan to increase our soap prices by 5 to 6% to combat rising input costs,” said HK Press, executive director & president of GPCL.