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HUL Resorts To Price Cuts To Beat Slowdown, Distributors Say

HUL cut prices in the range of 10-12 percent for products in the home and personal care category, distributors said.

Various products made by Hindustan Unilever Ltd., including Lux soap, Surf Excel detergent and Dove Shampoo, sit for sale on a store shelf in Mumbai, India. (Photographer: Prashanth Vishwanathan/Bloomberg News)
Various products made by Hindustan Unilever Ltd., including Lux soap, Surf Excel detergent and Dove Shampoo, sit for sale on a store shelf in Mumbai, India. (Photographer: Prashanth Vishwanathan/Bloomberg News)

India’s largest consumer goods maker cut prices of soaps and detergents to drive volume growth amid a slowing economy, three distributors told BloombergQuint.

Hindustan Unilever Ltd. lowered prices in the range of 10-12 percent for products in the home and personal care category, the distributors said on the condition of anonymity out of business concerns.

While the company declined to comment on BloombergQuint’s emailed queries about the price cuts citing silent period ahead of its second-quarter earnings announcement, the distributors said prices were cut mid-September.

  • Price of 250 gram Surf Excel detergent bar cut to Rs 25 from Rs 28.
  • Price of 1-litre Surf Excel easy liquid wash lowered to Rs 150 from Rs 170.
  • Price of 250 gm Rin detergent bar cut to Rs 15 from Rs 17; price of its pack of four bars (250 gm each) lowered to Rs 60 from Rs 68.
  • Price of 75 gm pack of Pears soap cut to Rs 35 from Rs 41.
  • Price of Lifebuoy (pack of four) soaps cut to Rs 75 from Rs 94; and price of the 125-gm pack reduced to Rs 20 from Rs 26.
  • Price of Lux 100 gm soap lowered to Rs 20 from Rs 27.
  • Price of 50-gm Dove soap cut to Rs 20 from Rs 24.

HUL, at a press conference after announcing its results for April-June period, had said it was planning to cut prices of its Lux and Lifebouy soaps taking into account the budget changes and to spur demand in the category.

Volume growth eased for fast-moving consumer goods firms as Indians are spending less on biscuits and spices to shampoos and toilet soaps, indicating a slowdown in the economy that expanded at its slowest pace in six years in the quarter ended June. A BloombergQuint survey in August revealed that inventory days for distributors have gone up to 20-40 days from 15 days about four months ago and 10-12 days a year earlier. The slowdown, according to another survey, drove 5,000 FMCG distributors out of business in the last six months.

Volume growth of the FMCG sector dropped 3.6 percentage points sequentially to 6.2 percent in the April-June period, data released by Nielsen India showed. And HUL’s volume growth fell to lowest in seven quarters during the period. But the worst may not be over yet. Nine large FMCG distributors across India told BloombergQuint that demand for consumer goods failed to pick up even in the quarter ended September and credit days rose.

HUL will declare its results for the July-September quarter on Oct. 14.