On the one hand, where in December, common buyers were relieved after retail prices fell down to the lowest in a year, on the other hand, the prices of some prominent daily use commodities have gone up by 2 to 58% from January. After the increase from 3% to 20% earlier in January 2022, this is the third major price rise introduced by FMCG companies in a year. Prior to this, FMCG companies had increased the prices of their commodities in May 2022 when the rates of raw materials had gone up.
For quite some time now, the sales of FMCG companies in the rural sector, which comprises more than 1/3rd of the market share, were sluggish, and the companies were forced to work by reducing their margins. But now, due to profits in agriculture, governmental motivation, and a good crop yield, FMCG companies are expecting an increase in the rural demand this year. This is the reason why in order to increase their margins once again, the companies are hiking the commodity prices.
As per market numbers, in January 2023, Mondelez India, which produces brands like Hindustan Unilever, Colgate Palmolive, Cadbury, and Oreo, has increased the prices of multiple products. These brands have also reduced the weight of many products. It is expected that during the ongoing financial year, the growth of FMCG companies will be 7-9%, and the companies, in order to shift the burden of input expenditure on the customers, can increase the product rates.
