“India is going through probably the most difficult economic situation. Inflation is high. We are probably getting to a situation where we have now seen 14 consecutive months of double-digit wholesale price inflation.”
— Nitin Paranjpe, Hindustan Unilever (HUL) Chairman
Hindustan Unilever (HUL) Chairman Nitin Paranjpe said India was going through the most difficult economic situation. He noted that inflationary pressures were beginning to impact demand. This had prompted some buyers of fast-moving consumer goods to temporarily cut back on purchases. “India is going through probably the most difficult economic situation. Inflation is high. We are probably getting to a situation where we have now seen 14 consecutive months of double-digit wholesale price inflation,” Paranjpe told shareholders virtually during his annual address recently, reported ET Bureau. “I don’t know when we have last seen something like that. FMCG markets, which have generally been strong for a long period of time, have started seeing the effects of this,” he said.
In May, wholesale prices rose to a record when put beside the new reporting benchmark, with the gauge climbing to just short of 16%. Inflation has impacted the fast-moving consumer goods (FMCG) market, Paranjpe told delegates at the annual general meeting of the country’s biggest consumer company. “And, more recently, we have seen market rates moderate and volume growth rates have actually become negative in the short term,” he said.
“The immediate future is challenging, and it will require some astute handling and a balancing act to be able to make sure that growth does not stall and we are able to contain inflation.”
— Nitin Paranjpe
Consumer goods volumes fell about 1% during FY22, according to global consumer research firm Kantar Worldpanel (formerly IMRB). HUL’s performance is considered a proxy for the broader consumer sentiment in India. HUL expanded value sales by 11% last fiscal, largely driven by price increases as it tried to offset energy, packaging and transport costs that rose about 50% from the past year.
“The immediate future is challenging, and it will require some astute handling and a balancing act to be able to make sure that growth does not stall and we are able to contain inflation,” the Chairman said. He also said that the company would try to mitigate some of the impacts of inflation by driving savings instead of passing price increases to consumers.”
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