Facing inflationary pressure due to rising input prices, FMCG majors Hindustan Unilever (HUL) and Nestlé have hiked prices of some of their key products. While HUL has reportedly raised prices of products like tea, coffee, milk, and noodles, Nestlé has increased prices for Maggi noodles and its milk and coffee powder.
According to sources, HUL has hiked prices of Bru coffee powder by 3-7% across packs and those of Taj Mahal tea by 4-6%.
FMCG companies like HUL, Nestlé and others have been hiking prices almost every month. For instance, in February, HUL had hiked prices of Lifebuoy and Dove soaps by about 6% and 4%, respectively. It had also raised the prices of facewash across brands in the range of 5-9%. Price hikes were also seen in fabric conditioners, dishwashing bars and men’s grooming products. HUL had also raised the price of Bru coffee by about 3% in the previous month. It had also raised prices of Horlicks mixes in the range of 2-4%.
Last month, Nestlé had raised the price of Nescafe coffee by 6% and Nestea Ice Tea by 11%.
Even Godrej Consumer Products had last month increased prices of Godrej No1 by about 17-27% and Cinthol by 3-4%.
Analysts said that while FMCG companies have found it difficult to pass the full impact of raw material price inflation on to the customers for the fear of losing out on the rising demand after a prolonged lull due to the pandemic, some increases will continue well into the coming months. This will lead to a further contraction in the gross margins of most staple companies in the fourth quarter on a sequential basis. Continuous rise in raw material prices had hit gross margins of FMCG companies in the December quarter, which were down 300-800 basis points on a year-on-year.
