FMCG companies such as HUL and Tata Consumer have recently hiked tea prices, citing lower production due to unpredictable weather. During the September quarter earnings calls, many companies hinted at upcoming soap price hikes to protect their profit margins. The increase is due to rising prices of key raw materials such as palm oil, coffee and cocoa.
“The prices of palm oil derivatives, a key raw material in soap manufacturing, have increased significantly — up 30 percent since the beginning of this year,” Wipro Consumer Care Chief Executive Neeraj Khatri told PTI.
“In response, all major industry players have implemented price increases of around 78 percent to partially offset this increase. Our price adjustments are in line with these market trends,” he said. .
Wipro Consumer Care, part of Azim Premji-led Wipro Enterprises, owns brands like Santoor and Chandrika in the soap category. Market leader HUL has also increased the prices of tea and skin cleansing products, which comprise its soap business under brands such as Dove, Lux, Lifebuoy, Liril, Pears, Rexona etc.
Apart from tea and crude palm oil, the overall commodity outlook is benign. As a result, we have selectively increased prices on tea and skin care. “When making any price changes, we always ensure that we maintain competitive price parity,” a company spokesperson said.
Palm oil prices have risen by about 35-40 percent since mid-September due to an increase in import duty and a rise in global prices. Palm oil is mainly imported from Indonesia and Malaysia. Currently, the price of palm oil is around Rs 1,370 per 10 kg.
Prices of Lux soap (pack of 5 soaps) increased from Rs 145 to Rs 155 and Life Boy (pack of 5 soaps) increased from Rs 155 to Rs 165. Similarly, prices of pears (pack of 4 soaps) have increased. Rs 162 from previous Rs 149.
Besides, prices of other personal care products from HUL have also gone up, according to a distributor. According to Abneesh Roy, executive director (research) at Navama Institutional Equities, after HUL, most other players will now hike prices.
“In FMCG everyone generally follows the market leader, so gradually all players will increase prices,” he said.
Last week, Tata Consumer Products Limited (TCPL) managing director and CEO Sunil D’Souza had said in an interview with PTI that the company has gradually increased prices in segments like tea by around 25-30%. And it has not been implemented. Load on users at once
It had gone for gradual price increases as it wanted to continue the momentum towards volume.
“We don’t want to have a demand shock. So we have to be comparable. We have to make sure that there is continuous growth in the category. So we have translated little by little, and we will gradually increase the prices. ” he said.
In its quarterly earnings statement, Godrej Consumer Products Limited (GCPL) marked an upward trend in prices of palm oil and its derivatives, which have seen a double-digit increase since the beginning of the year.
Pointing to a fair increase, Santol and No. 1 soap maker Godrej had said that the GCPL management had decided not to pass on the entire cost increase to consumers and hence the price hike was due to input prices. I will stay behind the hike. (with PTI input)