InvestorQ : How soon do you see the FMCG companies like Marico, Dabur, Britannia and HUL raising their product prices in the market?
diksha shah made post

How soon do you see the FMCG companies like Marico, Dabur, Britannia and HUL raising their product prices in the market?

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Priyanka N answered.
2 months ago
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With inflation high and the price of most agricultural commodities trading higher, it was only a matter of time before the large FMCG companies take a call to hike the selling prices. In fact, the feedback from the market is that most of the leading FMCG companies are expected to hike the selling prices of goods to offset the sharp inflationary effect.

The reasons are not far to seek. In the last few weeks, prices of most raw material inputs have gone up sharply. In fact, some of the more vulnerable FMCG players like Marico have already gone for price hikes and may look at more rounds. There are others like Dabur, Parle and Patanjali who are in the sidelines but could be upping their prices soon.

Marico is the manufacturer of the popular Parachute brand of oil. The cost of some of the key inputs like coconut oil, edible oil, tea, copra and palm oil have been on an uptrend due to demand-supply mismatch. Hence it is not surprising that Marico was first off the block ot hike prices. However, competitive pressure does play a key role in FMCG pricing.

FMCG companies have tried to absorb some part of the spike in input costs. However, the leeway may now be limited with price hikes expected to be in the range of 4-5%. Most FMCG players will look to first explore the other cost levers to cushion OPMs. The feedback in the market is that this may have been substantially exhausted and may hike prices soon.

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