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Consumer Goods Makers Cut Or Hold Prices Amid Coronavirus Outbreak

HUL and Godrej Consumer Products either cut prices or decide not to pass on higher input costs to consumers.

Lifebouy bottles at a store in Indonesia. (Photographer: Josh Estey/Bloomberg News)
Lifebouy bottles at a store in Indonesia. (Photographer: Josh Estey/Bloomberg News)

Two of India’s largest consumer goods makers have decided to either reduce prices or not pass on higher raw material costs on some personal hygiene products amid the worldwide Covid-19 outbreak.

Hindustan Unilever Ltd. has cut prices of Lifebuoy sanitisers, hand wash and Domex Floor Cleaner by 15 percent, according to a press release. “We are commencing production of these reduced priced products immediately and these will be available in the market in the next few weeks."

Godrej Consumer Products Ltd. has also decided not to pass on higher raw material prices on soaps, Sunil Kataria, company’s chief executive officer for India and SAARC region,said in a statement to BloombergQuint.

“We were planning for a price increase to partially cover for this spike in input costs," Kataria said. "However, given the spread of Covid-19, we have decided to hold off this increase, currently."

The price of palm fatty acid distallate, a key ingredient in soaps, has risen more than 20 percent over the last year, shows Bloomberg data.

HUL had announced a 5-6 percent increase in soap prices, citing higher raw material prices in January. The new stock with increased prices landed in the market in February.

“HUL does selective and judicious price changes and grammage across its portfolio in the normal course of its business,” the company said in an emailed response to BloombergQuint. “We have not increased prices of our skin cleaning portfolio in the last one month.”

To be sure, HUL cut prices of soaps in the first half of the fiscal to spur growth in the category and pass on lower raw material costs to consumer.

Shampoo Gets Cheaper

HUL has cut prices of shampoos in the last fortnight as raw material turned cheaper amid the worldwide Covid-19 outbreak. India’s largest consumer goods maker increased grammage as well as reduced prices by 10-33 percent in fresh stock shipped since the beginning of March, according to distributors that BloombergQuint spoke with. They didn’t want to be identified out of business concerns.

Crude oil has plunged to its lowest in 18 years as the flu and pneumonia-causing new coronavirus pandemic has stalled global trade. That has made sodium lauryl sulfaten and sodium lauryl ether sulfate (derivatives used in shampoos) and high-density polyethylene used in packaging cheaper, providing room to cut prices.

Sachets of Hindustan Unilever Ltd. Sunsilk shampoo, fromleft, and Dove shampoo are displayed for sale above a store. (Photographer:Kuni Takahashi/Bloomberg)
Sachets of Hindustan Unilever Ltd. Sunsilk shampoo, fromleft, and Dove shampoo are displayed for sale above a store. (Photographer:Kuni Takahashi/Bloomberg)

According to distributors, the company cut prices of Sun Silk, Tresemme, Clinic Plus and Dove. For example, a smaller stock keeping unit like 40 ml Clinic Plus pack is priced at Rs 10, 33 percent lower than the earlier price of Rs 15.