Due to the cost of everyday items like soap, detergent, biscuits, packaged food items, the general public may soon face the shock of inflation. Fast-moving consumer goods (FMCG) companies are preparing to increase the prices of products again to reduce the pressure on profits due to increase in crude oil-related inflation, packaging material and fuel costs. This increase will happen in a phased manner.
What do the companies say?
Officials of the companies indicated during recent quarterly results that they have already increased prices by three to five percent. There may be further increase if cost pressure continues. Companies say that the cost of raw materials, logistics and packaging has increased due to the global supply chain being affected due to the Iran conflict. Weakness in rupee against dollar has also increased the pressure. Its impact is visible on many sectors including food products, cosmetics, beverages and household items.
Companies are also adopting volume reduction strategies in packaged products to deal with cost pressures and maintain profits. Additionally, discounts and promotional expenses are being cut, stock management is being strengthened and the supply chain is being made more efficient. Despite this, consumers are likely to be burdened with rising costs. However, an effort is being made to maintain small packs of Rs 5, 10 and 15 in the market, so that the impact on sales is less.
Times are very unstable, be prepared in every way
Hindustan Unilever Ltd. Chief Financial Officer Niranjan Gupta said, we are facing the burden of 8 to 10% inflation. We have increased the prices by 2% to 5%. If pressure on commodity prices continues, the company may increase prices further. Mohit Malhotra, global CEO of Dabur India, said the company is facing 10% inflation in the current financial year. The company has increased prices by up to 4% in various categories. It is also taking cost control measures.
Britannia Industries CEO Rakshit Hargave said fuel and packaging costs have increased by about 20 per cent. The company is considering both options of increasing the price directly and reducing the weight of the packet. Prices of larger packaged products will increase. Nestle India Chairman and Managing Director Manish Tiwari said, the current times are very volatile. It is difficult to predict what is going to happen in the next two months. Therefore, we have to be prepared in every way.
Video-