Hind Lever raises product prices

Hindustan Lever (HLL), the country's largest consumer goods company, has today announced that it is increasing the price of its Surf and Rin detergent brands in the range of 4 to 7 per cent.

In a media statement the company said that it is increasing its prices of its detergents - Surf Excel Quickwash, Surf Excel Blue and Rin Advanced Powder. The products with the new prices will be in the market in the next few days as the earlier stock gets over.

Consumers will have to shell out Rs 103 for a 1 kg pack of Surf Excel Quick Wash or a 1.5 kg Surf Excel Blue. The prevailing prices are Rs 99 for a similar pack under the Surf franchisee. While a 1 kg Rin would now cost Rs 45, up by Rs 3. A 500 gm of Surf Excel Quick Wash and 750 gm of Surf Excel Blue will be increased from Rs 50 to Rs 53.

The company had last year increased the price of a 20 gm sachet of Surf Excel Quick Wash by 50 paise to Rs 2. A 500 gm Rin advanced powder has been increased by Re 1 to Rs 22.

The company's move of raising prices was expected, as analysts put it rising input costs have become a worrying factor for the consumer goods players.

However, the quantum of price reduction done by detergent makers last year is not comparable with price increase as the latter is more reflective of cost pressures.

Arch rival Procter & Gamble, recently announced that it is increasing the price of Ariel and Tide by about 5 per cent. Raw material such as soda ash, STPP and all petroleum-based products such as laminates and polywrappers costs have gone up by around 6-8 per cent.

In the September quarter of 2004, Lever's soaps and detergents division profit declined to Rs 165 crore as compared to Rs 255 crore in the September quarter of last year.

However, Procter & Gamble has benefitted from price reductions, with the market share in the detergent segment rising. P&G Hygiene and Healthcare (PGHH), the listed entity of P&G that does contract manufacturing of detergents for P&G Home Products has shown an improvement in performance. P&G Home Products markets Tide and Ariel.

During the quarter ended December 31, 2004, PGHH's contract manufacturing income jumped 48 per cent tot Rs 75 crore and for the six month period, the growth was 48 per cent.

However, segment profits have fallen marginally to Rs 3.8 crore in the December quarter from Rs 4.1 crore in the corresponding period last year.