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Nirma finishes sudsy price war at low end
Reeba Zachariah & Shobhana Subramanian in Mumbai |
August 23, 2004 09:11 IST
The detergent price war, raging for the last six months, has been confined to the top end of the market, and prices at the low end are set to rise. Hindustan Lever and Procter & Gamble are slugging it out at the premium end by dropping prices. At the lower end, however, detergent firms are looking to raise prices.
The first salvo has been fired by Ahmedabad-based Nirma. Consumers may have to pay about 10 per cent more for its products. The company told Business Standard that it was raising prices because of the rise in the costs of raw materials. Nirma currently sells a 500 gm pack for Rs 10 and a 1 kg pack of detergent for Rs 19.
The market leader in the low-end segment is Hindustan Lever's Wheel. Hindustan Lever may also increase the price of Wheel. A Hindustan Lever spokesperson, however, refused to comment on the issue. For Hindustan Lever, Wheel is a major brand and contributes Rs 1,000 crore (Rs 10 billion) to its revenue.
Wheel is priced at Rs 10 for a 500 gm pack and Rs 19 for a 1 kg pack. The Hindustan Lever management had recently observed that the price cuts could not be sustained for long. The international prices of linear alkyl benzene, the key raw material for detergents, climbed by 14 per cent between November 2003 and June 2004, while domestic prices went up by about 7 per cent.
Jyothi Laboratories, known for its Ujala whitener, recently launched Vanamala in the low-end detergent market. Vanamala Active is priced at Rs 21 for a 1 kg pack and Rs 11 for 500 gm, while Vanamala is priced at Rs 18 for a 1 kg pack and Rs 9.50 for 500 gm.
An executive with Jyothi Laboratories said: "Vanamala detergent is positioned against Wheel and Nirma. The company is contemplating a price realignment for its brands, following the changes that have taken place in the market."
However, the company has so far not revised the prices of Ujala or Speed. Speed competes with Procter's Tide and Hindustan Lever's Surf, while Ujala is pitted against Hindustan Lever's Sunlight.
Henkel Spic's low-end detergent brand, Chek, is priced at Rs 20 for a kg and Rs 10 for 500 gm. A Henkel Spic spokesperson said, "We do not have any immediate plans to increase the price of the low-end brands."