MARKET UPDATE
| Prices may shoot up with new FMCG packaging norms Wed, 03 Oct 2012 00:19:14 +0530 |
| Business Standard Economy Policy News The new packaging norms, which will kick in on November 1, will push up the product prices. The companies no longer have the window available to tweak grammage, in case the raw material prices increase. This will mean they will have to increase product prices to avoid eroding margins. While firms such as Godrej Consumer (GCPL) and Dabur said they saw no immediate impact on pricing, most companies are bracing up for the situation when input prices begin to pinch. Marico executives were not immediately available for their comments. R S Sodhi, managing director, Gujarat Co-operative Milk Marketing Federation (GCMMF), which markets the Amul brand of milk and dairy products, said standard packaging would bring in price rationalisation. Only the cola companies don’t see an impact on pricing, as they use standard packs. “Packs of 200 ml, 300 ml, 500 ml, 600 ml, 1 litre, 1.5 and 2 litres, as prescribed by the consumer affairs ministry, are already used by us. So, we do not see an impact on pricing,” says a Coca-Cola India executive. On an average, commodity prices have remained volatile in the last six to eight months, as crude oil and agricultural inputs have fluctuated. This has put pressure on companies whose emphasis has largely been on volume growth. In the last few quarters alone, most FMCG companies have seen topline growth in excess of 15 per cent driven mostly by volumes. |
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