Inflation to weigh heavier on households; grocery, consumer goods will soon be 5-20% costlier
household budgets, potentially worsening stressed urban demand.
Starting this month, fast-moving consumer goods (FMCG) companies such as Hindustan Unilever, Godrej Consumer, Dabur, Tata Consumer, Parle Products, Wipro Consumer, Marico, Nestle and Adani Wilmar are rolling out price hikes to offset higher commodity costs and increased customs duty, said executives at companies and FMCG distributors. The entire basket — from tea and edible oil to soap and skin cream-will be 5-20% more expensive, marking the biggest price hike in 12 months.
Companies' production costs have swelled due to 22% increase in import duty on edible oil this September, and up to 40% in calendar year 2024. In 2023 too, the cost of key commodities such as sugar, wheat flour and coffee had surged.
«We are increasing prices across our brands as we speak,» said Mayank Shah, vice-president at Parle Products, which makes Hide & Seek and Fab biscuits. «Such a price increase is happening after one year; we are hopeful it won't impact demand, which is already under pressure.» Parle is set to introduce packs reflecting the revised prices across its entire portfolio.
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