Amid rising prices of palm oil, consumer goods (FMCG) companies are currently giving consumers the opportunity to increase prices slowly to avoid talk of inflation or products becoming more expensive. Due to the new tactics of the companies, everyday essential items have quietly become expensive by five to seven percent. Experts say that if the prices of raw materials including palm oil do not come down, then in the fourth quarter of the current financial year, such companies can impose huge price increases on consumers without any shame. Fast Moving Consumer Goods (FMCG) companies are imposing price hikes on their products. It was claimed that the full benefit of the price increase was certainly not being passed on to consumers. One reason why FMCG is not passing on the entire price increase to consumers is that while urban demand is stagnant, rural markets are seeing a revival.
While edible oil companies generally pass on price hikes to consumers with a lag of five to fifteen days depending on the volume, packaged food companies raise prices in the mid-single digits so as not to hurt demand. “We have already implemented some price increases,” Britannia Industries said. Then we are looking at three percent to five percent price increase between the third and fourth quarters. Some have been implemented in December itself. But most of the price increases will be implemented in the fourth quarter. Since, we are still taking a wait-and-see approach regarding the adverse trend in palm oil prices. After this a decision will be taken regarding price increase. But being the leader in this market, some price increases have to be implemented. As a company we know that we do not want the entire price increase to pass on to consumers. We are taking several steps as per the Price Effectiveness Program (CEP). Parle Products, the company making Parleji biscuits, has also implemented a price increase of five to seven percent due to the increase in raw materials. According to the company’s claim, the price of raw materials has increased by 18 percent to 20 percent. A lot of activity is being seen in the rural market as compared to the urban market. Demand in the urban market is currently stable.
Pockets became lighter and people didn’t even know
Britannia Industries made goods expensive by three percent to five percent
Average price increase on Parle products from five percent to seven percent
Due to increase in palm oil prices, Godrej Consumer Products also increased the prices of soap.
Adani Wilmar has increased prices in line with fluctuations in edible oil prices.
