Britannia to hike product prices over rising cost amid COVID-19
Food company Britannia Industries has announced it will gradually undertake a price hike of its products in view of a sharp rise in cost amid the COVID-19 pandemic. Firm officials said it is being done due to a surge in cost during the first quarter of the ongoing fiscal year. Britannia joins several other food companies that have announced price hikes recently.
'Taking price calls in a gradual way'
"The commodity inflation was sharp during the (first) quarter (of the current fiscal). We are taking price calls in a calibrated and gradual way to offset the cost pressure," Britannia MD Varun Berry said, according to news agency PTI.
Britannia aiming to increase e-commerce sales
Company officials said it is not easy to increase prices during difficult times. It is relying on the reopening process, that would lead to greater traction in consumption, they added. The firm is focusing on new product lines, fresh product launches, and increased e-commerce sales. Britannia aims to increase the contribution of e-commerce sales from the prevailing 2% to 5%.
Britannia sets aside Rs. 130 crore for capacity building
Britannia has also allocated Rs. 130 crore for capacity building in the current fiscal. "We have invested Rs. 130 crore in the capacity building during the quarter. The company was expanding the Khurda plant in Odhisa, and Tamil Nadu facility. A greenfield unit is also coming up in Uttar Pradesh and land has already been acquired," Berry told the agency.
Britannia's shares take a jump
Britannia's shares had jumped 3.5% to Rs. 3,540 on Monday as the company announced its plans for a price hike. Its stocks had earlier been trading between Rs. 3,400 to Rs. 3,450, reports say.
Other food companies also announced price hikes
Besides Britannia, several food companies have raised prices in the recent months, citing challenges posed by COVID-19. Just last month, Mother Dairy had hiked milk prices by Rs. 2 per liter in Delhi-NCR and several other cities. Prior to that announcement, dairy giant Amul had raised its milk prices by Rs. 2 per liter across India.
