Consumer Companies Set To Hike Prices As Cash Crunch Impact Wanes
Consumer goods companies were forced to absorb higher raw material costs to maintain volumes.
After a tough four-five months, consumer companies are finally beginning to see demand return to pre-demonetisation levels, top bosses at two of India's largest consumer companies -- Marico Ltd. and Nestle India Ltd. told BloombergQuint. They were speaking on the sidelines of the CII National FMCG Summit in Mumbai on Wednesday.
This gives fast moving consumer goods companies (FMCG) room to pass on some of the high raw material costs to consumers. Most were forced to take on the burden of high commodity prices as they focused on volume growth instead, especially in October-December quarter.
The government's partial cash ban in early November had hit these companies the hardest as cash-strapped consumers chose to hold back discretionary spends.While Marico termed it as a "severe impact" in its third quarter earnings, Nestle India's chief executive officer and managing director Suresh Narayanan had quantified the impact at Rs 100 crore.