HUL cuts prices, raises grammage in detergent and dishwash segments

Hindustan Unilever Ltd (HUL) has cut prices of its products and increased grammage in the detergent and dishwash segments.

The effective price drop is in the range of 10-25 per cent and the grammage increase is between 17 per cent and 25 per cent. This is due to a correction in raw material prices. HUL has increased the weight of the Rin bar from 120 gm to 140 gm and the price remains Rs 10.

The price of Surf Excel Matic (liquid) has been cut to Rs 199 from Rs 220 for a one-litre pack. The price of Surf Excel Easy Wash (liquid) has been cut from Rs 205 to Rs 190 for a one-litre pack.

In dishwash, the consumer goods maker has cut the price of Vim liquid (185 ml) to Rs 15 from Rs 20 and the grammage of Vim Bar has gone up to 375 gm from 300 gm and the stock-keeping unit is priced at Rs 30.

In an email, HUL said it had no comments to offer because its annual results were ahead.

These price cuts have come after the fast-moving consumer goods industry in India increased prices and cut grammage for the last two years due to inflation, which also had an impact on demand.

PRICE PICTURE

• Rin bar 120 gm is increased to 140 gm and costs Rs 10 
• Vim bar 300 gm is now 375 gm and priced at Rs 30 
• Surf Excel Matic liquid price cut to Rs 199 from Rs 220 for 1 litre pack  
• Surf Excel Easy Wash liquid price cut to Rs 190 from Rs 205 for 1 litre pack 
• Vim liquid 185 ml price reduced from Rs 20 to Rs 15

“They are passing on the benefit of benign raw material costs to customers via cuts in grammage and prices. Rural has been a pain point because volumes have been under pressure for consumer companies due to inflation. Consumers have avoided discretionary expenditure due to price rise,” said Vishal Gutka, vice-president, research (consumer and retail), Phillip Capital India.

In a recent talk with Business Standard, Sanjiv Mehta, managing director and chief executive officer, said: “During the next two years, there will be a period of flux, where price growth will become lower, but volume growth will start kicking in only when you start passing on the benefit of lower commodity prices to the consumers. I would say that you need a trigger for the commodity prices to start deflating. One of the big triggers could be if the Ukraine-Russia crisis gets solved, we will certainly find commodity prices going down. However, if they remain at an inflated level, there would be some level of stress from a consumer perspective.”

He added: “The way I would position it is if commodity prices come down, we would be able to start passing on the benefit to consumers, and consequently volume growth will move up to the normative levels. Headline inflation this year will be lower because the base period has high inflation. But to meaningfully correct the price-value equation, commodity prices would have to go down.”