Friday, March 05, 2010

FMCG Products to be Costlier

Beauty creams, hair oil, shampoos and other household items will cost more as FMCG firms plan to increase prices by up to 7 per cent due to the excise duty hike announced in the Budget.

Kolkata-based FMCG player Emami announced it will increase prices of its products between 3-7 per cent due to the increase in the input costs as a result of the excise duty hike coupled with the surge in the transportation cost.

"There is an increase in the input cost due to hike in excise duty and also because of the transportation cost, we are looking to increase the prices of our products," Emami Group of companies Director Aditya Agarwal told PTI.

Emami sells personal care products under the brand names Boroplus, Fair and Handsome, Navratna Oil and health products like Sonachandi Chyawanprash. Besides, Godrej Consumer Products, which sells products like soaps under the brands Godrej and Cinthol, said it will increase the prices of products by 2-5 per cent while baby diapers will become costlier by up to 10 per cent.

Earlier, leading consumer products companies have said budget measures such as the partial rollback of excise stimulus and higher fuel and packaging costs have added to the already inflationary commodity environment and will have to be passed on to consumers some way or the other.

The Union Budget has made a two per cent hike in excise duty across the board while slapping levies on petrol and diesel, partially rolling back stimulus measures in the face of economic revival.

We are looking at hiking prices by 5 per cent across categories by April or May. The rising cost of commodities, packaging and increase in excise duty has forced us to take such measures," Godrej Group Chairman Adi Godrej.

Marico CEO Saugata Gupta said that his company might consider increasing the prices of its Parachute brand of hair oil, but any hike would only be marginal. "We may go for some price correction but marginally. So far we have not planned anything," Gupta said, adding the company planned to focus on pushing volumes first.

FMCG major HUL, however, said it will not comment on any forward looking queries. Delhi-based Dabur said it is not looking at any price hike as most of its products are manufactured in excise-free zones.

"We are not looking at any price hike. 90 per cent of our products are manufactured in excise free zones. So it does not have any direct impact," a company official of Dabur said.

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