India’s top biscuit maker Britannia Industries, which has already raised prices of its products by 8-10%, says it will effect another price hike if input costs escalate further.
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The company says it had resisted hike in prices for the last seven years, but inflation hovering at a 16-year-high has now forced its hand. The rise in input costs have been across the board, especially in wheat, oil and sugar, according to Neeraj Chandra, vice president, sales and marketing, Britannia Industries. “We will review costs and we will review prices. We prefer a stable price environment. But if inflation continues to impact us we would have to raise prices,” he says. “We cannot predict the time period or the percentage of hike.”
A 20-25% increase in input costs has led to new cost cutting initiatives. Energy and transportation are two areas where the big focus is. “We have taken cost-cutting measures across the value chain, in terms of things like wastages and transportation, and this comes on (the) back of years of cost-cutting measures, said Chandra. The company, though would continue to add to its production capacity and increase investment for bringing out new products.The company is also looking at external sources of growth.