From The Economic Times · PTI · · 1m 50s
FMCG firms freeze prices despite rising costs
Consumer goods companies are absorbing inflation to protect demand during the festive season, betting volume growth over margins.
In brief
Consumer goods companies are absorbing inflation to protect demand during the festive season, betting volume growth over margins. FMCG companies are holding prices steady through the festive season despite higher commodity costs, prioritizing sales volume over short-term profits. Originally reported by The Economic…
FMCG firms hold prices despite inflation
Major consumer goods companies are freezing prices through the festive season even as sugar, edible oils, and packaging costs surge. They've absorbed inflation through cost cuts instead of raising prices.
Modest price hikes already taken
FMCG companies implemented only 2 to 5 percent price increases in the June quarter to offset higher input costs. They're unlikely to raise prices further before the festive season ends.
ITC commits to holding prices
ITC's Foods Division CEO Hemant Malik said the company will maintain prices through the festive season despite cost inflation. Companies are absorbing increases through cost management and portfolio adjustments.
“We are attempting to hold prices”
Possible price corrections later
ITC's Hemant Malik indicated companies may revisit pricing in the third or fourth quarter if cost pressures persist. Most firms have only implemented three to five percent hikes despite much higher cost increases.
“Maybe in quarter three or quarter four, we will have to look at some corrections on prices”
Dabur takes selective price actions
Dabur India raised prices on select products to partly offset geopolitical impacts while keeping competitive pressure in mind. The company is closely monitoring the situation as it develops.
Sugar relief eases pressure
Government measures have eased sugar prices, providing relief to manufacturers. Parle Products expects most FMCG firms to hold prices at least until Diwali in October-November.
Volume growth over margins
FMCG companies are prioritizing volume-led growth over profitability. Strong demand in urban and rural markets makes companies reluctant to risk consumption slowdown through price increases.
“Companies would prefer volume growth rather than increasing the pricing right now”
Cost control becomes critical
With margins under pressure, FMCG firms are focusing on operational efficiencies and cost optimization. Supply chain disruptions and geopolitical uncertainties continue to strain input costs.
The short version
FMCG companies are holding prices steady through the festive season despite higher commodity costs, prioritizing sales volume over short-term profits.
