Will a fresh wave of inflation hit everything from oil and soap to biscuits and bread; will FMCG companies hike prices in September
Crores of consumers who purchase daily essentials may face another blow from inflation. Prices of items such as oil, soap, biscuits, bread, and other FMCG (Fast-Moving Consumer Goods) products could rise in September.
Following price hikes in the June quarter, several major companies are preparing to raise prices on select products during the September quarter as well. Companies have already signaled this move, raising concerns that household monthly budgets could be further strained in the coming days.
FMCG price hike likely in September
Rising raw material costs are the primary reason
Britannia may raise biscuit prices
Dabur and Godrej also set to hike prices
HUL and Tata Consumer also in focus
Rising raw material costs: Biggest factor
The biggest challenge currently facing FMCG companies is the rising cost of raw materials. Fluctuations in the prices of sugar, palm oil, and other essential inputs are directly impacting production costs. Additionally, volatility in crude oil prices, global geopolitical tensions, and monsoon-related risks are adding to the companies' concerns.
According to reports, FMCG companies raised prices by an average of about 2% to 5% during the June quarter. Now, in the September quarter, companies may again take measures such as raising prices on select products or reducing the quantity (grammage) within the packets. This means consumers could face a dual impact: paying a higher price while receiving less product in the same package.
Britannia biscuit prices may rise
Signals from Britannia are significant for consumers who buy daily food items like biscuits and bread. According to Britannia Industries, further price hikes could be seen for biscuit packets priced at Rs 5 and Rs 10.
Reports indicate that Britannia MD and CEO Rajneet Kohli has signaled future price increases, citing the rising costs of key commodities such as sugar and palm oil. The company has indicated that while the initial impact on prices was around 1 percent, the total effect could rise to approximately 1.5 to 2 percent going forward.
This will directly affect consumers who purchase packaged FMCG products for daily needs—ranging from biscuits for tea-time snacks to items for children's lunchboxes. Even a marginal price increase, particularly in small packs, can impact the monthly budgets of low-income families.
Godrej and Dabur May Also Raise Prices
Other major companies in the FMCG sector are also grappling with cost pressures. Godrej Consumer Products Limited raised prices across several of its products by an average of about 5 percent during the June quarter. The company may now consider another price hike for the September quarter.
However, the company is currently monitoring fluctuations in commodity costs. If raw material prices remain high, it could pave the way for further price hikes.
Similarly, Dabur India may also raise prices for select products amidst rising input costs. The company faces the challenge of protecting its margins; essentially, companies may adopt a strategy of passing on a portion of the costs to consumers rather than bearing the entire burden themselves.
HUL and Tata Consumer May Also Make Changes
Hindustan Unilever Limited (HUL) and Tata Consumer Products are also key players amidst this potential wave of inflation. HUL had raised prices for several of its products by approximately 2 to 5 percent in the first quarter of the financial year. The company may now revise prices in certain categories during the September quarter as well.
Reports quoting HUL CEO and MD Priya Nair indicate that price revisions could continue into the September quarter, given the inflationary environment.
Meanwhile, Tata Consumer Products MD Sunil D'Souza has also hinted that the company might consider further price adjustments if necessary. Small, incremental increases in the prices of everyday items—such as soap, oil, biscuits, bread, tea, coffee, and other essentials—can collectively drive up total monthly expenses.
While companies argue that preserving margins amidst rising costs is essential, the question for consumers is how long they must bear the burden of these escalating prices. If multiple major companies raise prices simultaneously in September, the inflationary impact on the FMCG market could become even more pronounced.
For now, companies are closely monitoring commodity prices, crude oil rates, the monsoon, and global conditions. However, indications from Britannia, Godrej, Dabur, HUL, and Tata Consumer suggest that the September quarter may bring costlier FMCG products rather than the affordable goods consumers might be hoping for.