Price Hike in FMCG Companies: FMCG or Fast Moving Consumer Goods (FMCG) companies are now going to increase prices and five major FMCG companies in India have also said yes to this. FMCG companies have predicted price hike citing rising inflation rate and fluctuations in commodity prices. FMCG companies are considering increasing prices by 4-10 percent to maintain volume growth, it remains to be seen when this is announced.
RBI governor has also expressed concern over food inflation
Today, during the announcements of the Reserve Bank’s monetary policy, RBI Governor Shaktikanta Das said that food inflation has raised RBI’s concerns. Food inflation has a 46 percent weightage in the retail inflation rate. Food inflation has contributed 75 percent to the retail inflation rate in May and June.
Britannia Industries said- prices will have to be increased slightly
According to the Economic Times report, Britannia Industries Managing Director Varun Berry had said in an analyst call that the inflation rate is expected to remain between 4-5 percent in the coming months and if this happens, we will have to increase prices a little. In the analyst call after the first quarter results, Britannia MD clearly said – “We have done what we could. We have not increased prices for a long time but now the time has come to start consolidation.”
Dabur India Limited hinted at increasing rates in the food business
Dabur’s Chief Executive Mohit Malhotra said that due to the rising inflation rate of food items, we may have to increase some prices in our food business. This increase can be up to 2 percent. Let us tell you that Dabur had hiked the price of healthcare products by 6 percent in the first quarter of the current financial year. At the same time, prices were increased by 1.5 percent in the home and personal category.
Parle Products also adopted the path of increasing prices
Mayank Shah, Vice President of Parle Products, has also admitted that due to the increase in the prices of sugar and cocoa, they will also have to increase the prices of their products. The company has already increased the rates of some of its brands. Sugar, flour, cocoa are the main raw materials for the company and due to the rising inflation rate, the rate hike will have to be taken. However, this increase will not be as much as it had to be done due to the Covid crisis.
What does HUL have to say?
According to Hindustan Unilever, prices of most commodities will remain stable except tea leaves. In an analyst call, top HUL officials have said that we cannot assure about tea but single digit pricing can be seen in the remaining months of this financial year.
Mondelez India Foods Pvt Ltd
Just last week, Mondelez’s global chairman and CEO Dirk Van de Put said that food inflation will have an impact on the household expenditure of lower and middle-class families. Mondelez India is famous for popular chocolate brands like Cadbury Dairy Milk and Toblerone.
Why are FMCG companies going to increase prices- know 3 reasons
- Britannia, Parle, Dabur and Mondelez are planning to increase the prices of their products by 4-10 per cent soon.
- The prices of cocoa, flour and sugar have increased due to which the cost of their products has increased and now the companies are ready to increase the prices.
- To boost demand for a long time, i.e. for several quarters, FMCG companies had held back the decision to increase prices. Now the burden of rising food inflation and global commodity prices will have to be passed on to the customers.
How much have the prices of flour, sugar and cocoa increased so far
For packaged food companies, the price of flour has increased by 20 percent in 2 years.
Sugar prices have increased by 40 percent in 2 years.
For packaged food companies, the price of flour has increased by 60 percent in 2 years.
Why were the prices reduced after the Covid period
The FMCG industry faced a lack of demand in the post-Covid era, while to compensate for the high input costs, prices were increased by almost a quarter in the two years after Covid. Now that consumers are clearly preferring cheaper products, prices have been reduced in the last four quarters.
Golden future lies ahead for FMCG sector
According to the latest report of Crisil, the FMCG sector in India will be able to achieve growth at the rate of 7-9 percent in this financial year. If you have noticed, then remember that on June 4, on the day of the results of the Lok Sabha elections in the country, when the Indian stock market fell, only the FMCG sector was in the lead. Due to the continuation of urban demand and the rural demand gaining momentum, the pace of volume growth will remain. People will remain interested in regional or local brands, especially in the case of tea, snacks and biscuits because their prices are low.
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