Tag: price hikes

Carrefour halts PepsiCo sales in France, citing ‘unacceptable’ price hikes

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Carrefour is telling customers it will no longer sell PepsiCo products like Pepsi, Lay’s crisps and 7up because they had become too costly, in the latest tug-of-war over prices between retailers and global food giants.

From Thursday, shelves with PepsiCo products at Carrefour stores in France will be accompanied by a note saying “We are no longer selling this brand due to unacceptable price increases,” a spokesperson for the French retailer said.

PepsiCo did not respond to a request for comment.

The US company said in October it planned “modest” price hikes this year as demand held up despite rises, leading it to hike its 2023 profit forecast for a third straight time.

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Over the past year, grocery retailers in several countries including Germany and Belgium have announced they stopped orders from consumer goods firms due to price rises, a tactic in price negotiations that have become more fraught due to inflation.

It is unclear whether PepsiCo products already on Carrefour shelves will be withdrawn, the spokesperson said, adding it cannot stop shoppers from buying those on display.

The signs would only be put up in Carrefour’s stores in France, the spokesperson said, confirming local media reports.

Carrefour has been one of the most active retailers to challenge big consumer products and food companies over prices.

Last year, it started a “shrinkflation” campaign of sticking warnings on products that have shrunk in size but cost more. The spokesperson could not immediately confirm on Thursday if this was still the case.

In its efforts to bring down inflation, the French government has asked retailers and suppliers to wrap up annual price negotiations in January, two months sooner than usual.

A preliminary reading from the INSEE statistics office on Thursday showed consumer prices in France rose 4.1% year-on-year in December, with yearly food inflation slowing down to 7.1% from 7.7% the month earlier.

France’s finance minister has previously threatened to claw back what he described as “undue” profits from food companies with special taxes if they did not pass on their own lower costs to consumers already struggling with high energy bills.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Vivad Se Vishwas Scheme 2: Centre likely to initiate penalty settlement for pharma firms

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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There could soon be a breather for both the government and the pharmaceutical companies under the proposed Vivaad Se Vishwas 2 scheme announced in the Union budget 2023.

According to sources, the government is soon likely to initiate to settle their long-pending disputes arising out of penalties that were levied by the National Pharmaceutical Pricing Authority on pharma majors for over-pricing of essential drugs.

On February 1, Union Finance Minister Nirmala Sitharaman, in her Budget speech announced the Vivad Se Vishwas 2 scheme, proposing to settle contractual disputes of government and government undertakings where an arbitral award is under challenge in a court, a voluntary settlement scheme with standardised terms will be introduced.

The scheme is aimed at reducing government litigation.

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“Once pharma companies opt for settlement under this scheme, the government can unlock around Rs 5,000 crore to Rs 6,000 crore,” sources added.

It is noteworthy that the National Pharmaceutical Pricing Authority (NPPA) had initiated penalty cases against some pharmaceutical companies for prescribing higher medicine prices, despite these being under the essential category and there being a price cap thus, these cases were hanging in for quite a long time.

It was in 2021, when government had initiated to settle these pending disputes with pharma majors under a one-time settlement scheme but, the government could not notify the norms under the then proposed scheme.

Read Here | Drug Diplomacy—Here’s why India needs a stricter pharma regulation

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Consumer durables to witness 3-5% price hike as higher import costs amid rupee fall add to input expenses

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Prices of home appliances and consumer electronics, including TV, washing machines, and refrigerators, are expected to go up by 3 to 5 percent from May end or the first week of June as manufacturers pass on the impact of rising input costs to buyers, according to industry players.

Moreover, the depreciating Indian rupee against the US dollar has put further woes on manufacturers as imported components have become costlier, with the industry largely being dependent on imports for key components.

Adding to the challenges, there has been shortage of parts triggered by piling up of containers at Shanghai port due to strict lockdown in the city following the surge in COVID-19 cases. This has put pressure on the inventory of the manufacturers, and several top line products that have lesser domestic value addition and are largely dependent on imports are not available in the market.

Also read: Crude oil price surges 5% overnight after flows of Russian gas to Europe fall

According to the Consumer Electronics and Appliances Manufacturers Association (CEAMA) fall of the Indian rupee against the dollar is creating more problems for the industry.

“Raw material prices are already going up and now the US dollar is going up as the Indian rupee is devaluing. All manufacturers would be now looking at the bottom line (income/profit). From June onwards, we will see a price increase of 3 to 5 percent,” CEAMA president Eric Braganza told PTI.

The hike would be in most of the product categories ranging from washing machines and cooling products such as air conditioners and refrigerators, besides other appliances. Some AC makers have already increased prices in May but some others are expected to follow either by the end of this month or June.

“The industry would be making payment for imported materials as it starts coming in,” Braganza said, adding, “if dollar is still at Rs 77.40 against the Indian rupee, the manufacturers would have to make price adjustments.”

However, he also added that if the US dollar settles down in the next two weeks to the previous level of 75 then they would have not to make such price adjustments. The rupee slumped by 15 paise to end at 77.40 against the US dollar on Thursday.

Also read: Strong US dollar and weak global demand drag crude oil prices to a 2-week low

Panasonic India & South Asia CEO Manish Sharma said there is continued pressure on input costs, though the company is working to minimise the impact on consumers.

“Last price hike we undertook was in January 2022. However, with increasing commodity prices, consumers can expect a 4-5 percent price hike soon across product categories, including refrigerators, washing machines, microwave ovens, among other appliances,” he said.

Similarly, Super Plastronics Pvt Ltd (SPPL) which has branding licences for international brands that include Blaupunkt, Thomson, Kodak and White-Westinghouse is also planning to increase prices of its TV range.

In 2022, there have been lots of challenges, starting from the war, then Covid situation and lockdown in China, and now the Indian rupee falling to an all time low against the US dollar.

“All this has pushed the brands to struggle in sourcing, production and supply,” said SPPL CEO Avneet Singh Marwah, adding, “As a result, there has been an increase of 20 percent in raw material and commodity prices, we will increase product prices in June and July by 3-5 percent for all brands including Thomson.”

Over the Shanghai lockdown, Haier Appliances India president Satish NS said it has disrupted the supply of components and the impact would be visible from June itself. “The major impact would be on AC and flat panel TVs. Refrigerators would be less impacted,” he said. However, he also ruled out that there would be any major price impact because of this.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Mahindra to hike tractor prices; sees growth potential in farm equipment segment

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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[wealthdesk shortname=”M&M” isinid=”INE101A01026″ bseid=”500520″ nseid=”M&M” sector=”Auto – Cars & Jeeps” exchange=”nse”]

In March, Mahindra & Mahindra (M&M) saw a 45 percent rise on a month-on-month (MoM) basis in tractor sales. To understand the outlook buoyancy in the tractor space, CNBC-TV18 caught up with Hemant Sikka, President-Farm Equipment Sector, Mahindra & Mahindra.

Sikka affirmed that March shaped out well for the entire auto industry. Going ahead, he expects the whole tractor industry to do very well. He believes agricultural season will be very good, and he is already seeing a lot of buoyancy in the market.

“The month of March shaped out very well for the industry and especially for us in Mahindra. We did pretty well. So overall, we are seeing that the industry ended on a very good note and going forward, as we enter into this main season for the agriculture sector, we are looking at a very good season ahead of us,” he said.

He anticipates a lot of growth potential in the farm equipment segment within M&M.

“The farm implement segment is a big thrust area for us; we believe there is a lot of growth potential there for the farm equipment sector for us to grow within M&M,” he added.

“We are seeing a lot of buoyancy in the market. We are seeing renewed demand for tractors coming up, very strong production we are seeing and this is giving us a lot of confidence that going into this very important season for the tractor industry, I think the whole tractor industry will do very well,” he added.

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On price hikes, he said that the company took three last year and plans to increase prices this year as well. He explained that since commodity prices have been on a tear in the last 18 months, another price hike will happen in the next few weeks in the tractor segment.

“The commodities have been on a tear for more than 18 months. We were quite okay getting into this New Year, but we have seen that the prices have not moderated; the commodities are still on a very strong roll-up and all of this cannot be passed on in one go,” he mentioned.

“So, we took three price increases last year, we intend to take more price increases this year to pass on this huge inflation that we are seeing on the input cost. We have to space it out because we also have to see that our farmers are able to absorb these increases, but I think overall, we have played the price game in a very mature way passing on three times last year and again, another price increase may happen in the next few weeks,” Sikka said.

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Watch the video for the full interview.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Russia-Ukraine War: Rising prices of necessities force Indians to tighten belts

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Many Indians are cutting down on fried food and even vegetables as the Russia-Ukraine war has inflated the prices of items from edible oils to fuel, threatening a sputtering recovery in the consumption-based economy after two years of battling the COVID-19 pandemic.

Consumers are feeling the bite as companies pass on a surge in costs since the invasion, battling the first hikes in five months this week in the prices of diesel and petrol, as well as more expensive vegetable oils.

“God only knows how we will manage this level of price rise,” said Indrani Majumder, the sole earner in a family of four in Kolkata. She added that the past two years of the pandemic had brought a halving in salaries.

These days her family eats more boiled food to save on the cost of edible oil, she said. It is just one of almost a dozen homes where people said they were taking similar steps.

India’s economy expanded at a pace slower than expected in the quarter from October to December, and economists forecast a further dent to growth in the current one, as high fuel prices bring a jump in inflation.

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Private consumption contributes to the largest share of gross domestic output, at nearly 60 percent.

But since Russia’s invasion of Ukraine in late February, Indian firms have raised prices of milk, instant noodles, chicken and other key items by about 5 percent to 20 percent.

About 800 million of a population of nearly 1.4 billion received free government supplies of staple foods during the pandemic, and even small price rises now can mean a knock for their budgets.

Families’ finances could stay anaemic for the third year in a row, warned Pronab Sen, India’s former chief statistician.

“The process of rebuilding savings was only beginning post the pandemic,” he added. “Because of this latest shock, they will have to cut back on consumption,” he said.

Darkening Picture

Surging global prices of crude have prompted companies in the import-dependent nation to raise retail prices of petrol and diesel twice this week. India imports 85 percent of its crude oil, which has seen prices rise nearly 50 percent this year.

India is also the world’s biggest importer of edible oil, shipping in nearly 60 percent of its needs. But the price of palm, the country’s most widely consumed edible oil, has jumped 45 percent this year. And supplies of sunflower oil, which Ukraine and Russia produce in large quantities, have been disrupted.

Also Read: Govt closely monitoring global commodity price movements amid Russia-Ukraine war: FinMin

Some wholesalers said their sales of edible oil had fallen by a quarter in the past month as prices rose.

These factors helped keep India’s retail inflation in February above the central bank’s comfort level of 6 percent for the second month in a row, while the wholesale rate was more than 13 percent.

“The timing of input price inflation could not have been worse in the context of a slowing consumption trend,” financial services firm Jefferies said in a note.

The Reserve Bank of India has said it is monitoring crude and commodity prices ahead of its next monetary policy meeting in early April. But markets do not expect the RBI to change key rates, as it looks to prioritise growth.

This stance compares with global central banks, which have either raised rates or are weighing whether to do so to curb inflation. For instance, policymakers of the US Federal Reserve called this week for big rate hikes in May.

Also Read: Oil prices fall as EU looks unlikely to ban Russian oil

For consumers, there is little relief in sight.

The Confederation of All India Traders estimates input costs for makers of consumer durables and fast moving consumer goods (FMCG) to rise another 10 percent to 15 percent this month as fuel prices rise, an expense destined to be passed on to the final consumer.

In Kolkata, vegetable vendor Debashis Dhara said higher transport costs would bump up vegetable prices by a further 5 percent this week. His sales have already halved since February.

Also Read: FMCG makers to go for 10% price hike to mitigate inflationary pressures

Mother Dairy and Amul raised milk prices by nearly 5 percent this month, while FMCG companies such as Hindustan Unilever and Nestle are charging more for items such as instant noodles, tea and coffee.

Broiler chicken prices have jumped nearly 45 percent in six months to a record Rs 145 rupees a kg this week, as key feed ingredients corn and soymeal have become costlier after supplies from the Black Sea region were affected.

Fertiliser prices have shot up to a record $150 a tonne since Russia, one of the biggest producers, rolled tanks and soldiers into Ukraine.

“It has become very difficult to manage our monthly budget,” said Archana Pawar, a homemaker based in Mumbai. “This kind of price rise is forcing us to cut down consumption.”

Also Read: Fertiliser stocks fall after government’s urea production push

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Rural demand unlikely to worsen further; will take calibrated price hikes: Godrej Consumer

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Sameer Shah, CFO, Godrej Consumer Products, said that the company will continue to take calibrated price hikes. He added that similar price hikes have been taken by competitors too. Elaborating further, he said that the company has taken a 10 percent price increase for the India business until now.

“We have been taking calculated price increases, something which has been underway since last year; we will continue to take calibrated price increases also going ahead. In terms of competition, generally, most of the FMCG companies have been taking calibrated price increases in the categories in which we are playing. We haven’t seen any company holding back on pricing action. And in parallel, we would continue to take price increases,” Shah said.

Also Read: Demand impacted by rural slowdown: Emami

Also Read: FMCG companies brace for inflation impact; margins likely to be hit

On revenue, he said that 85 percent of the company’s revenue comes from consumer staples and 20 percent of its exposure is to rural India. Shah remains confident about rural demand and doesn’t expect it to worsen any further.

“For us, around 80-85 percent of our portfolio is staples. The rural contribution is relatively lower as compared to some of our peers. It’s close to around 28 percent. But we do believe that rural consumption could get more impacted because of inflation as compared to urban,” he said.

“So, in very short term, we expect rural demand to be more impacted as compared to urban. But hopefully, if the monsoons are as what they are expected at this point in time, we do expect that within 3-6 months, the demand should come back to normal levels. I’ll be very surprised if rural completely slumps in terms of consumption. In the short term, the demand does have its own negative impact, but in the medium term, demand remains very much intact,” he added.

On commodity prices increasing, he said that some of it might be transient. He shared that in order to combat inflation arising out of rising input prices, the company plans to work on its cost strategies. Giving details on inflation faced by the company, he said that soap segment has been impacted the most by rising palm oil prices. He also mentioned that consumer inflation may force the company’s discretionary portfolio to witness a pause as well.

Additionally, he expects some inflation, margin pressure for the next 3-6 months. However, he expects the year-on-year (YoY) drop in gross margin to be the least in Q4.

He said, “We will continue to take calibrated price increases to mitigate the impact. In parallel, we will continue to work on cost saving programs to nullify the impact of the increase in commodities. In this quarter, the YoY drop in gross margins will be the least if we look at businesses in India. If all goes well, perhaps we could even maintain our YoY EBITDA margins.”

“The trends are very encouraging. What has happened over the last two-three weeks is that there is increase in commodities and input cost, which means that there could be inflationary pressure as well as margin pressures, maybe for next three-six months,” Shah explained.

Watch the video for the full interview

Catch all stock market updates here

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow