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FMCG companies to reduce prices of its products

03-March-2001
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FMCG companies to reduce prices of its products

Fast-moving consumer goods giant Hindustan Lever Ltd. (HLL) is poised to cut prices of its products under Kissan brand. So too are Dabur (with its Real) and Pepsi (with its Tropicana). Nestle‚ India also may follow suit. The decision to cut prices comes in the wake of the Budget announcement that the fruit- and vegetable-based products would be completely exempted from excise duty. These include fruit juices, pickles, jams and ketchups. The duty on these products was 16 per cent till last year.

Fast-moving consumer goods giant Hindustan Lever Ltd. (HLL) is poised to cut prices of its products under Kissan brand. So too are Dabur (with its Real) and Pepsi (with its Tropicana). Nestle India also may follow suit.

The decision to cut prices comes in the wake of the Budget announcement that the fruit- and vegetable-based products would be completely exempted from excise duty. These include fruit juices, pickles, jams and ketchups. The duty on these products was 16 per cent till last year. The price cuts are widely expected to spur the demand for such products.

According to ORG-Marg's retail audit report for January-December 1999, branded packaged ketchup, jam and pickle sales have been growing by 1.75 per cent.

HLL is still working out the percentage by which prices will be slashed. In 2000, the processed food segment accounted for Rs 136 crore in sales for HLL. Dabur Foods seems to be pursuing a similar strategy.

Analysts are of the view that HLL will be most benefit from the decision, Dabur being the other major gainer. While HLL and Dabur are clear on their future course of action, Nestle‚ India is still in the process of working out its strategies for its Maggie brand of ketchup and pickles.

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