Hll Raises Prices Of Lux, Rexona

Fast moving consumer goods giant Hindustan Lever (HLL) has hiked prices of two of its most popular soap brands - Lux and Rexona.

The company has increased the price of Lux and Rexona (150 gm) by Re 1 each at Rs 16.50, while the price of a 100 gm Lux bath bar has gone up by 50 paise at Rs 11.50. The variant of Lux, Lux International (125gm), will now cost Rs 26 from the earlier Rs 24.50.

Senior HLL officials said, "The company has increased the prices because of the surge in raw material costs." Explaining the rationale behind the hike in two brands, "It was a business decision to hike the price of Lux and Rexona."

 

The company has managed to keep the prices for its other soap brands at the same level. "This is because, we will neutralise through cost-efficiency", say HLL executives. However, if the company is not able to sustain the price level, we may then pass it on to consumers, the executive pointed out.

With the market leader in this category HLL hiking the prices, other companies such as Godrej Consumer Products, may follow suit.

According to analysts, "The company has targeted Lux and Rexona because these brands can sustain the price increase. While a price hike on brands such as Breeze, positioned in the discount segment of the market or mass market brand Lifebuoy, the consumers will switch over to a substitute brand."

During 2001, the company launched a hair and body wash variant of Breeze, which has helped the brand gain ground. HLL also arrested the declining trend in Lifebuoy franchise. The company has also relaunched Lux and Lux International.

For the year ended December 31, 2001, HLL's home and personal care grew by 7 per cent, led by a 9 per cent growth in its power brands. Despite strong growth by Breeze and reversal of the Lifebuoy decline, overall personal wash sales were marginally lower.

HLL reported a net profit of Rs 1,641 crore for 2001, an increase of 25 per cent over 2000. Net sales for the year grew 3.5 per cent to Rs, 10, 972 crore.