Procter & Gamble, the fast moving consumer goods major, has raised the price of Whisper Ultra, the premium variant in its Whisper brand portfolio of sanitary napkins, by 10-15 per cent in response to an excise duty levy on the product announced during the 2010-11 Union Budget.
“The price hike was taken last month. The new stocks will hit the stores now,” said Tapan Buch, chief financial officer, Procter & Gamble Hygiene and Healthcare Ltd (PGHHCL),at the sidelines of the company’s 46th annual general meeting (AGM) here today.
PGHHCL,which sells sanitary napkins and cold and cough products under the Whisper and Vicks brands,respectively, posted disappointing results for the June quarter, primarily because of the 10 per cent excise duty levy on sanitary napkins as well as increasing competition from rivals such as Johnson & Johnson.
Top line growth for the quarter slipped to just nine per cent year-on-year, from 15-20 per cent in the previous three quarters of the financial year.
At the net level, profits were down 80 per cent during the quarter. As a result, the company posted a profit of just Rs 179 crore for the year ended June, against sales of Rs 902.9 crore.
Competition a factor
The rise in price of Whisper, went the company assurance, would be restricted to the premium variant,Ultra, which costs Rs 65 for a pack of eight. The recently launched Whisper Choice, a mid-tier variant, will not see price rises, Buch said. “The objective of launching Choice was to address the needs of women who use cloth instead of sanitary napkins. We do not want to touch the price points of Choice as of now,” he said.
An eight-pack of Whisper Choice is priced at Rs 20. The company brought down the price of the product by as much as 20 per cent last month to push sales. “Whisper cumulatively has a market share of 52 per cent and is the leading brand in its segment. Vicks Vaporub has a share of 33.5 per cent,” said PGHHCL’s chairman, R A Shah, during the AGM today.
The feminine hygiene business is the larger of the two businesses for PGHHCL, with an annual turnover of Rs 532 crore as against healthcare’s Rs 381 crore. Buch said the company was working on keeping the momentum going on healthcare, even as hygiene clocked good numbers for the company. “We re-launched Vicks Cough Drops in the year ending June, and will continue to see how and where we can improve our products,” he said.
According to sector analysts, though a leader in the rub segment with Vicks Vaporub, PGHHCL has been facing stiff competition in the lozenges segment, where Vicks Cough Drops operates. Even then, the company posted a 15 per cent sales growth for Vicks Cough Drops for the year ending June, according to its annual report, contributing to overall sales growth of 11 per cent for its healthcare business. Feminine hygiene saw overall sales growth of 24 per cent for the year in question.
