Households are likely to experience an increase in their monthly budgets due to several fast-moving consumer goods (FMCG) companies planning additional price hikes in the September quarter. This comes as these firms face heightened commodity prices, geopolitical uncertainties, and rising input inflation. Recent reports indicate that the FMCG sector, which had already enforced average price increases of approximately 2-5 per cent during the June quarter, is now gearing up for further, calculated raises.

FMCG companies are evaluating various strategies, including shrinkflation. This approach involves reducing the quantity of products while maintaining the same price point, allowing companies to protect their profit margins without visibly raising costs for consumers. Businesses across the sector are closely monitoring inflation rates, crude oil prices, and potential weather-related risks, like those posed by the monsoon and El Niño, to assess how much of the increased input costs can be passed on to consumers.

Britannia and Other FMCG Giants Prepare For Price Adjustments

Britannia Industries is reportedly preparing for an approximate 1.5-2 per cent price adjustment in the upcoming quarter, primarily through shrinkflation involving its Rs 5 and Rs 10 biscuit packs. The company is facing persistent high prices for sugar and palm oil, which has led to its strategic decision to reduce net weights in these product offerings. In a recent earnings call, Britannia’s Managing Director and CEO Rakshit Hargave stated that if the cumulative effect of previous price rises was around 1 per cent, the company anticipates an additional increase of about 1.5-2 per cent moving forward.

Despite these price adjustments, Britannia remains optimistic about market demand. Hargave commented on the robust demand environment, expressing confidence that the company can sustain its financial performance if input costs remain favourable. The strategy of decrementing the product size while retaining the price is aimed at ensuring consumers do not necessarily perceive a significant increase in maximum retail price (MRP).

Hindustan Unilever is also expected to initiate price increments across various product categories in the September quarter, forecasting a sequential inflation rate between 2-5 per cent compared to the previous quarter. CEO Priya Nair remarked that as the September quarter proceeds, calibrated pricing efforts will continue to mitigate inflation-related impacts while supporting volume-focused growth.

Additional Price Increases Across Major Brands

Dabur India is bracing for persistent high input costs and intends to implement further price adjustments alongside measures aimed at improving productivity and cost efficiency. Global CEO Mohit Malhotra indicated that the company’s future growth strategy will increasingly focus on revenue through pricing due to extensive inflation pressures, which force the company to pass costs onto consumers.

Godrej Consumer Products, which raised prices by about 5 per cent in the June quarter, is also likely to announce another price hike. However, CEO Sudhir Sitapati has stated that the company is awaiting clearer insights into commodity pricing before committing to any further increases. Currently, the company believes its pricing structure is adequate given the volatility in crude oil prices.

Tata Consumer Products has indicated a willingness to implement price increases based on ongoing cost pressures, with Managing Director Sunil D’Souza noting that further adjustments will be considered depending on inflation dynamics and external geopolitical factors. The firm aims for consistent mid- to high single-digit growth, although it remains cautious about raising prices not supported by actual cost increases.

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