From biscuits to shampoos, prices of FMCG goods to rise again in January

Firms say hike needed to cover high input costs

Expect fast-moving consumer goods makers (FMCG) to raise prices again next month owing to raw materials, transport, labour and packaging material costs remaining high or becoming even costlier.

Whether it is packaged wheat flour and basmati rice or biscuits and shampoos, these products will become 2-10 per cent more expensive.

Adani Wilmar will hike the price of its packaged wheat flour by 5-8 per cent and of its basmati rice by 8-10 per cent next month. “Commodity costs are high and other costs like transport and labour have also gone up by 5-8 per cent,” said Angshu Mallick, CEO at Adani Wilmar.

Mallick said packaging costs are up by 15-18 per cent.

Parle Products will also go for another round of price increases in the range of 4-5 per cent in the March quarter. This will be the second price hike the biscuit maker will undertake this fiscal year. 

“We increased the prices of some packs in the ongoing quarter and we will have to initiate another round of price increases of other packs in the next quarter as raw material costs are elevated compared to last year,” said Mayank Shah, the category head at Parle Products.

In the current quarter, Parle increased the prices of most products by 5-10 per cent. It did so by reducing grammage in stock-keeping units priced below Rs 20 and it increased the prices of packs above Rs 20.

The company had also hiked prices by 5-10 per cent in February and March.

Dabur India is in wait-and-watch mode as it monitors inflation. It  may raise prices in the March quarter if inflation sustains.

“The inflation in recent quarters has been truly unprecedented at over 9 per cent. We have taken up prices by around 3-4 per cent, besides undertaking several cost-saving initiatives to mitigate part of this impact,” said Mohit Malhotra, Dabur India CEO.

He said inflation continues to remain a concern. “Our intent is to mitigate this impact through calibrated price increases and cost saving initiatives,” said Malhotra.

Personal-care products maker CavinKare will also raise the prices of its shampoos and skin care products by 2-3 per next month. It had raised prices by three per cent in the first half of the year.

“In shampoos, we will increase prices largely in the non-sachet categories,” said CavinKare CEO Venkatesh Viajayaraghavan.

Wheat prices are up 20 per cent year-on-year. Average crude palm oil prices are higher by 36.5 per cent this year.  

However, Adani Wilmar has cut the prices of its edible oil in the last 45 days as the Centre slashed duties on imports. The company has lowered the price of its one-litre soybean oil pack from Rs 175 to Rs 155 and cut the maximum retail price of sunflower oil from Rs 170 to Rs 150.

“...we are passing on the benefit to the consumer. We will also advertise these price cuts to the consumer,” said Mallick.