RISING RAW MATERIAL costs across the commodity spectrum may compel fast-moving consumer goods (FMCG) companies to hike prices, a standard response during inflationary cycles. However, the situation is more complex this time.
Commodity inflation has emerged at an inopportune moment for FMCG firms. Urban demand remains weak, while rural markets are only beginning to recover.
This dual challenge has companies adopting a cautious approach to price increases, fearing a potential impact on sales volume. CEOs admit that any price hike will be "calibrated" to align with the fragile demand environment.
"The slowdown in FMCG demand poses a greater challenge than rising input costs. Sharp price increases could hurt sales, something companies can ill afford right now," explains Harsha V Agarwal, vice-chairman and MD of Emami and president of the Federation of Indian Chambers of Commerce and Industry (Ficci).
Esta historia es de la edición December 24, 2024 de Financial Express Mumbai.
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