Firms seek relief in 2025
Financial Express Chandigarh|December 24, 2024
• CEOs say move to be calibrated to align with fragile demand
RAGHAV AGGARWAL & VIVEAT SUSAN PINTO

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).

While companies are wary, some see price hikes as unavoidable. Tarun Arora, CEO and whole-time director at Zydus Wellness, emphasises the inevitability of adjustments. "Input costs are climbing across the board, from food to non-food categories. FMCG firms have no choice but to raise prices, albeit gradually. Low to mid-single-digit hikes are expected by January, given the weak demand sentiment," Arora notes.

Varun Berry, vice-chairman and managing director of Britannia, echoes the sentiment, pointing out the rising inflation in critical commodities like wheat, palm oil and cocoa. "Value growth in the FMCG market is declining, while input costs are surging. Price hikes are necessary to protect margins," he says.

Some companies have already implemented price adjustments in select categories. Tata Consumer, Hindustan Unilever (HUL), and Britannia have raised prices for products like tea and biscuits. Sunil D'Souza, managing director and CEO of Tata Consumer, hints at more increases in the pipeline.

Denne historien er fra December 24, 2024-utgaven av Financial Express Chandigarh.

Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.

Denne historien er fra December 24, 2024-utgaven av Financial Express Chandigarh.

Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.

FLERE HISTORIER FRA FINANCIAL EXPRESS CHANDIGARHSe alt
Financial Express Chandigarh

The year AI took centrestage

The debate if it is a blessing or a Frankenstein rages on

time-read
4 mins  |
December 24, 2024
Financial Express Chandigarh

Shyam Benegal, pioneer of parallel cinema, dies

JUST WHEN MAINSTREAM Hindi cinema stepped into an exciting new phase with the rise of the 'Angry Young Man' in the '70s, Shyam Benegal made a stunning debut as the writer and director of Ankur (The Seedling, 1974), propelling the parallel cinema movement in India.

time-read
2 mins  |
December 24, 2024
Financial Express Chandigarh

Honda, Nissan on merger road

SMALLER MITSUBISHI MOTORS, in which Nissan is top shareholder, was also considering joining and would make a decision by the end of January, the companies said.

time-read
2 mins  |
December 24, 2024
Financial Express Chandigarh

Now, Musk wants you to pay 'X-tra' as premium plans

● Marks the largest price increase since acquisition

time-read
1 min  |
December 24, 2024
Financial Express Chandigarh

For IT firms, it's a mixed blessing

\"DESPITE CURRENCY PRESSURES, the sector's growth is underpinned by strong demand, particularly in cloud and AI-driven transformation projects,\" said an industry analyst.

time-read
1 min  |
December 24, 2024
Financial Express Chandigarh

Toyota-Suzuki pact should be the template in India

ANALYSTS SAID THAT for the Indian market, auto firms can't afford to be just in segments like petrol and diesel.

time-read
1 min  |
December 24, 2024
Financial Express Chandigarh

UK insurer Aviva to shed up to 2,300 jobs in $4.65-billion deal

COMBINED COMPANY WILL SHED BETWEEN 5-7% OF ITS TOTAL WORKFORCE

time-read
2 mins  |
December 24, 2024
Financial Express Chandigarh

Noel Tata: From shadows to spotlight

THE NEW CHAIRMAN of Tata Trusts, however, has done enough to remove the earlier perception of \"lack of exposure\".

time-read
2 mins  |
December 24, 2024
Financial Express Chandigarh

US launches new probe into legacy Chinese chips

The effort could offer Trump a ready avenue to begin imposing some of the hefty 60% tariffs he has threatened on Chinese imports

time-read
1 min  |
December 24, 2024
Financial Express Chandigarh

In a note to India, Bangladesh demands Hasina's extradition

● Dhaka insists on Hasina's trial, India declines comment

time-read
2 mins  |
December 24, 2024