Consumer Goods Makers May Hike Prices To Offset Rise In Raw Material Costs
Consumers may have to shell out more money for their daily use products as consumer goods firms, which are facing inflationary pressure on their key raw material inputs, are considering marginal hike on their products price to offset it.
Some companies like Marico Ltd. and others have already gone for price hikes, while others, including Dabur Ltd., Parle and Patanjali Ayurved, are closely monitoring the situation.
The companies have been trying to absorb the price increase of raw materials like as coconut oil, edible oil and palm oil, but they’re unlikely to hold the prices of their commodities for a long time as that will impact their gross margins.
“We have seen a significant rise in input cost and especially edible oil in the last three to four months and that is putting pressures on our margins and costs,” Mayank Shah, senior category head of Parle Products, told PTI. “As of now, we have not taken any price hike but we are closely monitoring it and if it goes like this then probably, we may go for a price hike.”
According to him, these commodities are cyclic in nature.
When asked about the price hike, Shah said: “It will be across products as edible oil is being used in all products. It would be at least 4 to 5%.”
Dabur India Chief Financial Officer Lalit Malik said the recent months have seen inflation inching up for some key raw materials like “amla” (gooseberries) and gold.
“Going forward too, we expect some inflationary pressure in key commodities,” Malik said. “Our efforts will be to absorb the raw material price increase through our synergies and cost efficiencies, and undertake only selective and judicious price hikes, which will also depend on the competitive scenario in the market.”
For Haridwar-based Patanjali Ayurved, it’s still a “wait and watch” situation, and is yet to take a final call but hinted it’s also moving in that direction.