FMCG cos feel inflation heat, rule out price hike

Leading FMCG firms PepsiCo, Reckitt Benckiser and Coca Cola today said they were feeling the heat of high inflation which was putting pressure on overall cost, but ruled out price hikes in the immediate future.

"Inflation is biting and is a concern area for us and for others. We are not able to pass on the entire cost to the consumer, nor do we think we should," Reckitt Benckiser (India) Chairman and Managing Director and Regional Director (South Asia) Chander Mohan Sethi said.

"However, that automatically leads to pressure on our overall operating model," he added.

Food inflation has been hovering at over 9% in the last few weeks. Though in the week ended September 10, it dipped to 8.84% from 9.47% in the previous week, prices of key commodities continued to rule high.

Beverage majors such as Coca-Cola and PepsiCo have also said high raw material prices were affecting their businesses, forcing them to adopt cost effective measures to offset high input cost.

Commenting on the situation PepsiCo India Chairman Manu Anand said: "Clearly, like everyone else, we are facing pressure. Our attempts are to ensure maximise productivity and minimise the impact of passing to consumers."

Coca Cola India Chief Executive Atul Singh has also said that inflation is impacting its business but is not looking at raising prices.

"Inflation is there and it has also affected us, but we are not looking at raising prices," he said.

Apart from price increases in the past to counter high input costs, the company is also formulating cost-efficient ways to reduce the impact of surging raw material prices, particularly on packaging.

"We are focusing much more on productivity and trying to see what all we can take out on non-value cost to the consumers on every area of the supply chain so that we are able to minimise the price increase."