From cooking oil to soap, FMCG co’s plan a fresh round of price rises

FMCG companies increased prices by 3-5 percent last year.

New Delhi: Whatever the Union Budget is tomorrow, the pressure on the livelihood of the middle class is going to increase further. The country’s FMCG companies have planned to increase prices of products beyond the control of the government. As a result, the prices of daily necessities like soap, toothpaste, cooking oil, tea, coffee and packaged fruit juices prices may increase soon. According to a report in an all-India news outlet, FMCG companies including Godrej Consumer Products, Hindustan Unilever and Dabur have indicated that they are in talks to fix new prices of their products. The prices of FMCG products have increased in 2024. The companies are ready to increase prices again in 2025. They are just waiting for the announcement of the Union Budget.

Incidentally, FMCG companies increased prices by 3-5 percent last year. In some cases, apart from increasing prices, packets have been shrunk, products have been reduced at the same MRP. The highest price increase has been in the case of soap, hair oil, chocolate and biscuits. It is being said that FMCG products have become increasingly expensive due to rising raw material costs, supply chain costs, shrinking margins and weather uncertainty. He pointed to various factors like uncertainty that will make everyday items expensive. Companies have to fight against increasing demand. However, it is hoped that the prices of all these products will not increase in one go this year, but will increase gradually. However, it is believed that the demand will decrease further. It is noteworthy that FMCG products contribute 55-60 percent of the country's total GDP.

Currently, the middle class is struggling with inflation and non-growth in income and wages. At this time, the rise in prices of essential commodities will further pressure them. While the situation in rural areas has started to turn around, the recession in urban areas remains due to rising food prices, pressure to pay loan EMIs, and low wage growth. Experts say that due to the rise in prices of products of well-known companies, urban buyers may cut back on spending, avoid unnecessary products or lean towards products of local non-famous companies.

Finance Minister Nirmala Sitharaman will present the Union Budget in Parliament today. Will the government be able to improve the situation with measures in the Budget? Experts say that the government should prioritize increasing domestic consumption in both urban and rural areas. Some of the measures may include changing the income tax structure and increasing tax incentives under various categories to ensure higher income in the hands of the people. Increased allocation for social schemes like MNREGA and PM Kisan will help in job creation and employment guarantee schemes on the lines of MNREGA can be implemented in cities as well. Other measures could include providing subsidies on local raw materials and reducing GST rates and import duties.