New Delhi: Consumers in India may have to spend more on several everyday products in the coming months as FMCG companies prepare for another round of price adjustments. Rising commodity, fuel, freight and input costs linked to the ongoing Iran conflict are putting pressure on company margins.
The FMCG industry had already increased product prices by around 2-5% during the June quarter. Several major companies are now indicating that further price hikes could be necessary in the September quarter.
Britannia Signals Further Price Increase
Biscuits could be among the products affected by the next round of price revisions. Britannia Industries is expecting a 1.5-2% pricing impact during the current quarter.
The company may also adopt shrinkflation, particularly for its ₹5 and ₹10 packs. Instead of increasing the printed price, companies sometimes reduce the quantity of a product while keeping the price unchanged.
Britannia has pointed to higher costs of key ingredients such as sugar and palm oil. The price increases implemented during the June quarter did not completely offset the rise in input costs, according to the company’s management.
HUL Also Expects Higher Inflation
Hindustan Unilever is also preparing for increased input-cost pressure. The company expects 2-5% sequential inflation in the September quarter and has indicated that it could respond with calibrated price increases across different categories.
Other major consumer companies, including Dabur India, Godrej Consumer Products and Tata Consumer Products, have also indicated that elevated input costs could lead to further pricing action.
Why Are Everyday Products Becoming More Expensive?
The ongoing geopolitical conflict has contributed to higher energy, freight and commodity costs. For FMCG manufacturers, these increases can affect everything from raw materials and packaging to transportation and distribution.
Britannia, for example, reported a 10% increase in material costs during the June quarter. The company also said higher fuel and shipping expenses linked to the conflict had affected both its domestic and international operations.
This pressure is particularly important for products sold at low price points, where companies have limited room to increase prices without affecting demand.
Shrinkflation Could Be Another Strategy
Rather than raising prices sharply, some FMCG companies may choose to reduce the quantity in smaller packs. This approach allows brands to maintain familiar price points while managing rising production costs.
For consumers, however, this could mean paying the same amount for a smaller quantity of products.
What This Means for Consumers
The potential price increases could affect a wide range of household products, including biscuits, soaps, tea, packaged foods and other everyday essentials.
Companies are attempting to balance higher costs with consumer demand. If commodity and logistics costs remain elevated, further price adjustments could follow in the coming quarters.
For now, the extent of the impact on household budgets will depend on how input costs and the geopolitical situation evolve in the months ahead.
