White goods price to go up next month. Here’s what is causing the pinch – The Economic Times

Clipped from: https://economictimes.indiatimes.com/industry/cons-products/electronics/white-goods-price-to-go-up-next-month-heres-what-is-causing-the-pinch/articleshow/81503473.cms

Synopsis–FMCG companies, too, are contemplating a price hike or reduction in package sizes next month or so due to increase in prices of edible oil, skimmed milk powder, crude and packaging material cost, industry insiders said.

Prices of refrigerators, washing machines, air-conditioners and televisions are set to go up by up to 5-6% next month as companies plan to pass on recent increases in component costs, freight and container charges, and a sudden surge in prices of packaging materials. White goods makers have already started to communicate to retailers about the price hike from April, three senior industry executives told ET.

This will be the second price hike in the last three months, taking the cumulative price increase for these products to 10-12%, they said.

FMCG companies, too, are contemplating a price hike or reduction in package sizes next month or so due to increase in prices of edible oil, skimmed milk powder, crude and packaging material cost, industry insiders said.

India’s largest white goods maker LG Electronics India’s vice president Vijay Babu said after the 6-7% price increase in January, there will be another 3-4% price hike across appliances next month.

“The overall impact on input price increase is 11-13% for the last couple of months and we decided to pass it to consumers in phases so that it does not burden them,” Babu said. “Even today, containers are quoting at $4,000 per unit as compared to $600 pre-Covid. Even on television, there will be another 3% price hike after 5% in January.”

TV panel prices have gone up by around 20-30%, which companies will pass on to consumers.

Appliances industry body, Consumer Electronics and Appliances Manufacturers Association president Kamal Nandi said companies took a decision to pass on the price hike in phases since it is absolutely not possible to absorb so much hike in input prices.

Panasonic has already sent a notification of price increase of 6-8% for AC and 2% to 5% for refrigerator, washing machines and microwave ovens from April due to “higher cost of production” due to increase in prices of copper, aluminium, steel and plastic.

“This is a global impact and hence supplies and demand will continue to be in line with estimates,” Panasonic India CEO Manish Sharma said.

Retailers, however, fear this might impact the demand the industry has witnessed ever since India unlocked due to change in consumption habits. Great Eastern Retail director Pulkit Baid said the series of strategic price increases from brands may keep the first-time buyer on the edge this summer.

Fast-moving consumer goods companies, too, are battling an increase in input prices.

Parle Products senior category head Krishnarao Buddha said packaging cost including cartons and laminates has gone up by over 20-30% in last few weeks and so has that of edible oil.

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