FMCG companies increase prices to maintain margins due to high input costs

Fast-moving consumer goods companies have increased prices by 2% to 9% on soaps and body washes, 8% to 11% on hair oils, and 3% to 17% on select food items

Over the past 2-3 months, monthly household shopping bills have risen due to price hikes ranging from 2 to 17 per cent on certain foods and personal care brands products and categories by fast-moving consumer goods (FMCG) companies, according to a report by BusinessLine.

Companies have raised prices by 2 per cent to 9 per cent on soaps and body washes, 8 to 11 per cent on hair oils, and 3 to 17 per cent on select food items, the report said.

This increase follows nearly a year of declining prices, attributed to moderating commodity prices. After raising prices in 2022 and early 2023 to maintain margins due to high input costs, FMCG companies refrained from price hikes for most of FY24, but prices have started to rise again.

 

Despite the decline in crude and palm oil prices, the prices of other commodities such as milk, sugar, coffee, copra, and barley have been on an upward trend, the report further said.

Bikaji intends to raise prices by 2-4 per cent in FY25, having already initiated this process in April. Tata Consumer Products has also started working on price adjustments to align with its competitors.

As it refused to implement any price increase in FY24, Hindustan Unilever said it would not respond to short-term commodity fluctuations, taking pricing action only in the event of a “deterministic change in direction”. Similarly, Dabur India and Emami have indicated that they will implement low single-digit price increases this year.

Increase in prices of soaps, detergents

Godrej Consumer Products has increased prices on select stock-keeping units of soaps by 4-5 per cent. Hindustan Unilever has raised Dove prices by 2 per cent, while Wipro has increased the price of Santoor by 3 per cent, the report quoted data by Kotak Institutional Equities and trade.

The price of Palmolive Body Wash, sold by Colgate, has increased by a high single-digit percentage, while Pears body wash has seen a more modest increase of 4 per cent.

Detergent brands from Hindustan Unilever, Procter & Gamble Hygiene and Health Care, and Jyothy Labs have experienced price increases of 1-10 per cent on select packs, the report said.

Hindustan Unilever has increased shampoo prices across its portfolio by a low to mid-single digit percentage and skin care products by up to 4 per cent.

Due to inflationary pressures, Nestle has raised coffee prices by 8-13 per cent. Maggi oats noodles prices have increased by 17 per cent, and ITC’s Ashirvaad whole wheat prices have risen by a low single-digit percentage.