Price war in shampoo market over

Hindustan Lever Ltd (HLL) raised the price of its Clinic All Clear brand by 10 per cent, a move which has been interpreted by the industry as firmly marking the end of the price wars in the shampoo market.

"The price war in the shampoo industry, which was kicked off by HLL in March and was followed by others like Procter & Gamble (P&G), CavinKare and Dabur, has reached an extent where it becomes unsustainable," an industry source said. According to him, the detergents and shampoos businesses actualy posted declines in sales despite the price cuts, called "price correction" in the industry jargon.

An HLL spokesperson attributed the price rise to a relaunching exercise. While the 100 ml bottle is being priced at Rs 55 from the Rs 50 earlier, the price of the 200 ml bottle is increased from Rs 95 to Rs 105.

The HLL spokesperson said the prices of other packs of the Clinic All Clear brand remain unchanged at Rs 15 (for 25 ml) and Rs 2 (satchets). He said there would be no change in the pricing of the Sunsilk brand. The company's shampoo portfolio also includes Clinic Plus, Lux and Ayush and has a 50 per cent share of the Rs 1,100 crore market. P&G is number two, with 15 per cent of the total shampoo market.

The upward revision of the price of Clinic All Clear comes after the arch rival P&G relaunched its shampoo brand Pantene with a break-through formulation.

The HLL stock gained 1.13 per cent on the Bombay Stock Exchane, to close at Rs 125.45 on volumes of 6.6 lakh shares. However, FMCG sector analysts were sceptical of a sustained upward swing of prices in the shampoo market. An analyst said HLL increased the price of the brand which did not add much to the bottomline.

The hike in shampoo price follows a price hike of HLL's packaged tea brands and Surf Excel Quick Wash, which is sold in satchets.