 |
| Costly proposition |
Mumbai, Jan. 31: Procter & Gamble (P&G) is reworking its pricing upwards in the detergent segment as raw material prices hit the roof.
Tide and Ariel, its two flagship brands in the segment, may witness an upward price revision of 5 to 6 per cent.
The detergent brands belong to the unlisted subsidiary, whereas Whisper and Vicks are owned by the listed P&G entity in India.
P&G officials were guarded regarding the pricing issue. In 2003-04, the company had slashed the prices of Ariel and Tide by up to 50 per cent to ramp up volumes and market share.
P&G officials told The Telegraph that a marginal price revision will take place from March 1 because of the ?inflationary pressures?.
However, the price hikes contemplated are marginal in comparison with the cuts triggered in March last year. The company had slashed the price of Ariel from Rs 70 to Rs 50 for a 500 gm pack. The price of a 500-gm-pack Tide was also down to Rs 23 from Rs 43.
P&G?s competitor Hindustan Lever Ltd (HLL) was forced to revise its prices. HLL has already declared that it will react in an ?unblinking response? to any moves made by competitors.
The decision by P&G to rework its pricing comes at a time when raw material prices have shot up. It also marks the end of the first round of the price war as the FMCG sector is also looking at an upturn in sentiments.
It was actually in September 2003 that P&G had first slashed the prices of Ariel and Tide sachets by 50 per cent to cover a large segment of the consumer base. The revised price of Ariel and Tide stood at Rs 1.50 and Re 1 against Rs 3 and Rs 2 earlier, respectively.
A few months ago, P&G had revised the price to Rs 2 for an Ariel sachet from Rs 1.50, indicating that its price war had nearly ended. P&G officials said the upward revision in prices that are proposed in March will not include its sachet products.
Analysts said apart from margin pressures because of an increase in raw material prices, the company has realised its objective to rustle up some market share gains in its favour.
