Consumers may have to pay more for their daily essentials as FMCG companies consider another round of price hikes to offset the impact of an unprecedented level of inflation in commodity prices such as wheat, palm oil and packaging materials.

Moreover, the ongoing war between Russia and Ukraine has also dealt another blow to FMCG makers as they expect a rise in the prices of wheat, edible oil and crude oil.

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Companies such as Dabur and Parle are monitoring the situation and will implement calibrated price increases to ease inflationary pressures.

According to some media reports, makers like HUL and Nestle have increased the prices of food products in the past week.

“We expect a 10-15 percent increase from the industry,” Maynk Shah, head of category at Parle Products, told PTI.

Shah further noted that prices fluctuate widely and therefore it would be difficult to say the exact increase due to the volatility of the price.

The price of palm oil had risen to Rs 180 per liter and has now fallen to Rs 150 per litre. Similarly, the price of crude had risen to nearly $140 a barrel and has now fallen below $100 a barrel, he added.

“However, it’s still higher than it was before,” Shah said, adding that the companies are also hesitant to make significant price increases as demand bounced back after COVID and they don’t want to tinker with it.

Last time, the creators didn’t take the price hike to fully mitigate the impact and had absorbed some of it.

“Everyone is talking about a 10 to 15 percent price increase right now, even though the input costs are much higher than that,” he said.

Asked if Parle would also go hiking, Shah said it currently has sufficient stock of packaging materials and other supplies and would make a decision after a month or two.

With similar thoughts, Ankush Jain, Chief Financial Officer of Dabur India, said inflation continues unabated and is a cause for concern for the second year in a row.

“Inflationary pressures and ensuing price increases have led consumers to tighten their wallets and rethink discretionary purchases, while also reverting to smaller packaging. We are closely monitoring the situation and will implement calibrated price increases to keep inflationary levels low. reduce pressure,” he said. said.

Commenting on the current situation, Abneesh Roy, Executive Vice President of Edelweiss Financial Services, said FMCG makers are passing on high inflation to consumers.

“FMCG companies such as HUL and Nestle have high pricing power. They pass on inflation in coffee and packaging materials. We expect all FMCG companies to see a further increase of 3 to 5 percent in Q1FY23,” he added.

According to some news reports, FMCG majors HUL and Nestle have already raised the prices of foodstuffs such as tea, coffee and noodles, causing some trouble for consumers to maintain margins.

The reports claimed that HUL had increased the prices of Bru coffee, Brooke Bond tea, etc. as the company faced inflationary pressures.

While Nestle India has increased the price of its popular Maggi noodles by 9 to 16 percent, it has also hiked the price of milk and coffee powder, the reports said.

A HUL spokesperson had said: “We are witnessing consumer volume titration due to the impact of high inflation. In this environment, our priority is to provide value to consumers, invest in our brands and protect our financial business model.”

“We are first mitigating cost inflation by toughening up our savings agenda, looking at all cost lines with a sharp focus, and removing all non-value-adding costs.

“Given the inherent strength of our brands and our ability to execute, we have been able to provide the right price-value equation to consumers, protecting our business model in a highly inflationary scenario,” he added.


This post FMCG companies aim for a price increase of about 10% to ease inflationary pressures was original published at “https://www.zeebiz.com/market-news/news-fmcg-companies-to-go-for-around-10-price-hike-to-mitigate-inflationary-pressures-181189”

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