Kolkata based FMCG-major Britannia is considering to hike price across products by about 4-5% in order to make up for the increase in the cost of raw material. MD of the company reiterates that product price increase will be across select categories or for some premium products or across some particular geographies.
In the previous month, the company increased the price of dairy products by 10% after "milk prices went through the roof".
During the first quarter of FY20, the increase in raw material cost was 7% y-o-y which resulted in a 4% decline in profitability to Rs. 249 crore.
"Price increase will become important for us in doing business in the dairy segment, especially where prices of milk have gone through the roof. In bakery, the inflation is reasonable," Berry said here.
"This is a slowdown year and we do not want to affect consumer sentiments any further. So a 4-5 per cent price rise is what we are looking at across specific pack sizes. Hikes could be done selectively in regions too," he added.
The company expects demand to pick up pace over the next 6-15 months. So accordingly the price hike has to be effected such that the impact is not large.