NEW DELHI :
Packaged consumer goods company, Godrej Consumer Products Ltd (GCPL) has decided to hold off any price hikes on its portfolio of soaps given the increased demand for personal hygiene and cleaning products in the country amid the Coronavirus outbreak.
To be sure, GCPL makes Cinthol, Godrej Fair Glow, Godrej No 1 brand of soaps.
In a statement to the media on Thursday, the company said that a jump in raw materials, largely palm oil, had prompted large consumer goods makers to consider a price hike in the soaps portfolio.
However, the company is resisting taking a price hike immediately.
“Pricing in the soaps category has seen significant deflation in 2019. However, in recent months, we have seen a 30% increase in raw material inputs. We were planning for a price increase to partially cover for this spike in input costs. However, given the spread of Covid-19, we have decided to hold off this increase, currently," Sunil Kataria, CEO (India & SAARC), Godrej Consumer Products Limited said.
GCPL said it is also working towards ensuring a sufficient supply of its products including hand-sanitizers and hand wash in market."It is our sincere endeavor to ensure that stocks are replenished across all channels, so that our consumers can adopt better hygiene practices and stay safe. Our teams are also working around the clock to ensure that adequate stocks are available during these trying times," Kataria said.
The move comes as demand for brands such as Dettol, Savlon, Protekt, Lifebuoy has exceeded supply as shoppers have rushed to stock up on germ-killing soaps, sanitizers, and hand washes.
Earlier this year, India's largest packaged consumer goods firm Hindustan Unilever said it will take a price hike on its range of skin cleansing portfolio in a phased manner. The company that makes popular Lux, Dove, Lifebuoy brand of soaps had then said that impact of higher raw materials was driving its decision to hike prices by 5% to 6% in a phased manner, the company's CFO, Srinivas Phatak said in a post-earnings conference call in January.
The company's range of soaps with revised prices are already in the market, an HUL spokesperson said in response to query by Mint on Wednesday. However, the company maintained that price hikes were taken before the Covid-19 disease spread in India.
"The prices of palm oil, a key ingredient for soaps, has been increasing for many months, and at the end of 2019, the inflation was over 25%. In light of this, we increased prices in our skin cleansing portfolio by 5% to 6% across our brands: Lux, Lifebuoy, Dove, Hamas, Liril and Pears. This was well before the outbreak of the COVID-19 pandemic in India. The production of new stock started in January and we had shared an update to the market on Jan 31st 2020 during our December quarter earning calls," a company spokesperson said.