Groceries to get expensive: FMCG companies blame rising input costs

While manufacturing companies across sectors are still grappling to come to terms with the impact of demonetization, now rising input costs have led them to hike prices of their products or reduce the quantity they offer for the same cost. 

At least four FMCG companies, including Britannia, Amul, Dabur, and Parle, have admitted they will be either raising the cost of their products or cutting down on the quantity it offers for the same price, a report by The Economic Times said. 

After demonetization on November 8, 2016, FMCG manufacturers faced a tough quarter on the back of a sharp decline in demand which led to the companies cutting their production cycles. 

In the last one year, the price of sugar, milk powder, and palm oil have increased by 20-80%, as commodity prices remained volatile and production cycles were cut after demonetization, the report said. 

While Britannia is planning to hike the prices of its biscuits by 7%, Santoor soap's manufacturer Wipro Consumer Care said prices will go up by 5%. Butter and ice cream manufacturer Amul said will increase prices by 5-8%, and Britannia by 6-7%.

On the other hand, Parle was quoted as saying that it had reduced the quantity of biscuits and snacks after a gap of four years.

Apart from this, certain companies said they had rolled back freebies on their products. This includes, Vatika Shampoo, and Dabur.