Biscuit makers Parle and Britannia may hike biscuit prices by 3% to 6% over the next month on back of escalating raw material costs. Prices of biscuits may hike for the first time this year, despite the falling consumer demand amid an economic slowdown. Further, the rise in prices will be more visible in bigger packs while the smaller packs might witness grammage reduction.
While Britannia is likely to introduce price changes by the next 3-4 months, Parle may hike prices by the last quarter (January-March) of the current financial year.
Rise in prices of key ingredients like oil, wheat flour, and sugar is believed to be the main reason for the price hike.
Britannia, that holds market share of about 34%, may hike prices by 3% on selective brands, while its rival Parle Products, that has about 29% of market share, may go for a 5 to 6% hike in prices for both its premium and standard biscuit brands.
Due to the consumption slowdown in the country, Britannia Industries recently deferred its new product launches. The company said on the analysts call that the slowing demand is expected to revive in the next 9-12 months.
Earlier in August, Parle Products had said it may have to lay-off 8,000-10,000 employees, owing to slower biscuit sales and high pre-GST tax rates on biscuits. The biscuit maker, known for Parle-G brand also said that its sales have dipped 8-9% in the previous quarter.