Britannia began price cuts in April-June as commodity prices softened

The company continues to expand its rural distribution and now has 28,000 rural distributors onboard

After experiencing several quarters of price increases, Britannia Industries has begun to reduce prices due to lower commodity prices. During the quarter, the company implemented price cuts of around 1.8 per cent using a combination of increased grammage (product weight), promotional offers, and price cuts in the April-June quarter.

Varun Berry, the executive vice-chairman and managing director at Britannia Industries, conveyed this information to analysts during a conference call.

In its outlook on commodities, Berry stated, “We are very vigilant about competitive pricing actions. We are also closely monitoring the stock price situation of commodities. Finally, we are employing necessary pricing strategies to remain competitive, drive market share, and achieve profitable growth in the future.”

The biscuit major also experienced a demand slowdown in rural areas.

“While we have been outpacing the market’s growth in rural areas, there is sluggishness. Even in urban markets, although modern trade and e-commerce have been robust, traditional trade markets, both in rural and urban areas, have been slightly slower compared to what we’ve seen in the past,” Berry informed investors.

The company is continuously expanding its rural distribution and has now onboarded 28,000 rural distributors. Additionally, with commodity prices remaining low, Britannia faces increased competition from regional players who have been gaining market share.

“This is a phenomenon we’ve witnessed in the past as well. When inflation is high, local players tend to withdraw. But when things start to normalise, local players re-enter the market and offer significant schemes to attract customers and consumers. That’s the current scenario,” explained Berry.

The manufacturer of Good Day biscuits also emphasised that while it believes its margins are healthy, the company will focus on increasing its top line, volumes, and market shares, as these factors will, in turn, enhance margins.