New year, new pinch: daily essentials bill could rise


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The New Year will see increasingly expensive groceries, personal care products, packaged food and restaurant meals as freight, packaging and farm products become more expensive.

“We expect dairy prices to increase this summer,” said RS Sodhi, general manager of Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF), which owns Amul, the largest dairy brand in India. “Globally, inflation in the dairy sector is around 10%.”

Suresh Narayanan, managing director of packaged food maker Nestlé India, said next year would be difficult due to rising raw material prices. He expects a further rise in food prices.

“Although there is a rise in milk prices, opening the economy will lead to increased economic activity and increased demand – leading to escalation in prices,” he said.

“Globally, coffee prices are increasing dramatically. The disruptions on the supply side of cocoa, oil complex and packaging materials resulted in a cost increase of 4-5%. There is going to be a specter of food inflation that will haunt us. ”

The management of disinfectant maker Dettol and Lizol, Reckitt Benckiser, said in a September quarterly global earnings call that it was facing “one-time generation cost inflation” in all markets.

The prices of major commodities such as palm oil, crude oil derivatives, and palm, sunflower, rice bran and safflower oils increased 35-50% year-on-year former. Derivatives of crude, a staple raw material for personal care products, experienced 30% year-on-year inflation.

“Standby and monitoring mode”

“We had experienced unprecedented inflation of around 9% in the second quarter of this year and increased prices by 3-4% to mitigate the impact,” Dabur chief executive Mohit Malhotra said on Thursday during ‘a call to investors. “We initially expected inflation to slow down in the September quarter, but that seems unlikely now. We will monitor the situation for another quarter and in case inflation continues unabated, we will consider another. series of price increases in the fourth quarter. ”

A leading national distributor of fast-turnover consumer goods (FMCG) said five-six large companies had probed the trade on further price increases for the larger packs, but said those for the smaller packs in volume. entry level would not be changed.

“The higher prices will be visible on larger packaging intended for urban consumption, retailed in modern commerce and on e-commerce channels,” he said. The increase will come on top of prices which have increased 2-10% this year. Hindustan Unilever, Procter & Gamble, Marico, Dabur, Nestlé and Godrej Consumer Products have increased the prices of some packaging over the past six to eight months.

Restaurant meals, which are experiencing a revival with reopening and the end of year celebrations, should still weigh on consumers’ bills. “The prices of commercial LPG cylinders have been increased several times this year. The increase will significantly increase catering and delivery costs,” said Kabir Suri, president of the National Restaurant Association of India (NRAI). “Margins are under strain due to macroeconomic inflationary pressures, rising oil and now LPG.” Suri is also a co-founder of Azure Hospitality, which operates the Mamagoto and Foxtrot restaurant chains. He said the increased costs will be passed on to the consumer.

Cost reduction measures

Executives said reducing packaging costs by decreasing the number of layers, reducing pack content and reducing delivery costs by creating hyper-local distribution points will always need to be supported by further increases in prices. consumer prices. Last week’s cut in gasoline and diesel excises will have a marginal impact, they said.

The central government reduced excise taxes on gasoline and diesel on the eve of Diwali, leading to lower prices for gasoline and diesel. Some states have also lowered the value added tax (VAT) on fuels.

Soft drink prices are expected to increase 3-4% for some packs after a 1.5-year gap over the coming season, said Ravi Jaipuria, president of RJ Corp, the manufacturer’s national bottling partner. PepsiCo drinks. “We are trying to recalibrate and see how best to protect mass prices, but some increases will have to be made,” he said.

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