November 27, 2021

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FMCG Firms Hike Prices The Second Time This Fiscal As Input Costs Rise

2 min read

Grammage Reduction

Distributors for ITC told BloombergQuint on the condition of anonymity that its personal care brands Fiama, Vivel and Engage have turned costlier with bigger packs, especially those above 500 gm, bearing the brunt.

Smaller packs, they said, have witnessed a grammage reduction. The distributors sought anonymity as they feared business repercussions.

A spokesperson for ITC told BloombergQuint that prices of select items have been revised as a “last resort because input costs have gone up significantly”.

Transportation and packaging costs have also shot up, pressuring margins further.

Roy said companies have implemented price hikes to offset 75% of the input cost inflation. Still, they’re wary that passing on the full impact of the increase in input prices to consumers, wary that it may throw off course nascent demand recovery, he said. As a workaround, companies are cutting costs elsewhere such as promotions and advertisements.

“Edible oil (price) has gone up by 60-65% compared to last year, while wheat flour and sugar have turned costlier by 8-10%, making it difficult to absorb the cost,” Mayank Shah, senior category head at Parle Products, told Bloomberg Quint.

Dabur may also look at another round of price increases in the fourth quarter of the ongoing fiscal, its Chief Executive Officer Mohit Malhotra said. “Inflation remains a big concern and we aren’t seeing signs of any softening yet.”

Sesa Sen
2021-11-25 11:52:53

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