FMCG companies have already gone for judicious increases of around 2-5 per cent in the June quarter. The Fast-Moving Consumer Goods (FMCG) companies are likely to hold prices through the festive season despite a rise in commodity prices as the leading industry executives have said that the companies have already gone for judicious increases of around 2-5 per cent in the June quarter. They are unlikely to raise prices further before the end of the festive season, even as margins remain under pressure. FMCG companies are suffering the losses due to increasing prices of the commodities including sugar, as well as the impact of geopolitical disruptions, as they seek to protect consumer demand and maintain volume growth amid improving consumption. The increase in prices in the recent times, with sugar prices touching a new high as well as spike in the costs of key inputs such as edible oils, coffee, cocoa and crude oil derivatives used in packaging, amid geopolitical disruptions and supply concerns in global markets. ITC Chief Executive Officer, Foods Division, and Executive Director Hemant Malik said the company would maintain prices through the festive season despite cost inflation, reported PTI. "We are attempting to hold prices," Malik said, noting that companies have been absorbing a large part of the increase in commodity prices through cost management initiatives and portfolio actions. Referring to the impact of the GST rate reduction on several consumer products last year, Malik said the move had led to buoyancy in volumes across multiple categories and supported market demand. However, he indicated that companies may have to revisit pricing decisions later in the financial year if cost pressures persist. "Maybe in quarter three or quarter four, we will have to look at some corrections on prices," he said, adding that most FMCG firms have so far implemented only modest price hikes of around 3-5 per cent despite facing much higher cost increases. Dabur India CFO Ankush Jain said, "We have taken up prices on a few products over the past few months to partly mitigate the inflationary impact due to the geopolitical situation, while keeping the competitive intensity in mind. Going forward, we will be closely watching the situation as it develops." Further, Parle Products Chief Marketing Officer Mayank Shah was quoted by PTI as saying that most FMCG firms are expected to hold prices at least till Diwali, citing strong demand across urban and rural markets and a recent easing in sugar prices due to government measures. "Most companies would probably be holding the price right now. They will not increase prices because of the festive season. Nobody would like to disrupt demand," Shah said. According to Shah, demand has been encouraging across both urban and rural markets, and companies would prefer to sustain the momentum rather than risk slowing consumption through price increases. Vikas Kumar is Deputy Editor (Business) at Times Now driving coverage across policy, economy and markets. He possesses nearly a decade of experience i... View More