Prices for a variety of consumer goods, including packaged food and dairy products, liquor, refrigerators, air conditioners, imported apparel, and personal care products, are expected to rise by up to 10%, as a result of companies moving on certain input rising prices and the impact of rupee depreciation.
Milk prices have risen by a total of 8-9% in October-November 2022 and earlier this month, according to industry officials, raising the pricing of dairy products such as butter, ghee, cheese, and ice cream. Milk costs, according to industry analysts, will continue to grow. Luxury imported clothing and personal care goods will be hit harder as businesses aim to raise prices by 8-10%.
Air conditioners, refrigerators, and microwave ovens that rely on imported components would also witness a price increase, with the rupee trading at roughly Rs 83 per dollar. White goods businesses had also deferred the 2-3% price rise owing to the one-level tightening of energy labeling standards for air conditioners and refrigerators this season, but will now pass it on. Businesses stated that their current benchmark price is Rs 77-78 for $1.
Opinion of the industry experts about increased prices.
Top executives of companies, on the other hand, said the proposed price hikes of 3-10% over the next 1-2 months will still be among the lowest in the last two years, when inflation shot up to record levels and the rupee fell against the US dollar at a faster rate than before, and they do not expect this to have any considerable effect on the way the goods are being consumed, remembering that the overall inflation is softening. Businesses have mainly absorbed higher input and import prices to help in demand development, they added. From the April-June quarter, the sector anticipates a recovery in overall demand, notably in rural regions.
Dabur India CEO Mohit Malhotra told investors earlier this month that the mix of inflation is shifting, with crude and herb costs falling and imported concentrates becoming more expensive owing to currency depreciation. He stated that the firm is in the process of raising the prices of its food goods since previous price increases in these products were restricted to 4-5% compared to the company’s total price rise of 6.5%, leaving considerable space.
Food inflation remains at a somewhat lower level, according to Britannia Industries managing director Varun Berry, during the company’s results call this month. Wheat is on fire, overall consumer food price inflation was 6% year on year in the December quarter, and the dollar is rising, according to him.
According to him, the country would not face the level of inflation that it has had in the previous two years for some time. Berry, however, stated that Britannia will implement a 2.5-3.0% price rise for specific packs to account for ingredient cost increases.
According to Manish Bandlish, managing director of Mother Dairy, raw milk price stress is being felt across the business, putting pressure on consumer pricing that may last until October. He stated that there is a huge growth in demand for milk and milk products, but raw milk procurement prices have been continually firming up due to rising feed and fodder costs.
According to Abhishek Bajpai, CEO of Apparel Group India, which sells brands such as Aldo, Charles & Keith, and Bath & Body Works, inflation has had a minor impact due to the dollar’s value. He says that global cost prices are becoming more stable after being quite unpredictable in the previous year. Going on, he stated that the corporation attempted to absorb as much as possible inside itself and not pass it on to customers. Nonetheless, there have been minor pricing fluctuations in some circumstances.
Neeraj Bahl, managing director of BSH Household Appliances India, which manufactures Bosch and Siemens appliances, stated that prices will rise by 3-5% beginning in April. That is a little price increase, and the firm does not anticipate any impact on demand owing to the early arrival of summer, he noted.
Voltas, a Tata-owned appliance producer, stated on an earnings call that it has been holding off on price increases for the previous several months to allow demand to recover and that it may raise prices in the June quarter.
Diageo, Pernod Ricard, Radico Khaitan, and United Breweries have also said that they are aggressively pursuing price rises from the government as a result of inflation in essential raw materials such as glass, extra-neutral alcohol, and packaging materials.
The last call.
In India, states control retail and wholesale alcohol pricing, accounting for more than 65% of the entire market, making it difficult for corporations to raise prices swiftly. But, whoever raises and controls prices, it is ultimately the common man who bears the load of higher costs on their shoulders, along with the demands of managing their career and earning for their family!! Let us see what the new year has in store for the common man in the months ahead.
edited and proofread by nikita sharma