There is no one-to-on co-relation between the price of raw material and finished products and price hikes depend on what happens to the commodity, said Sanjiv Mehta, FICCI President and the CMD of Hindustan Unilever (HUL) on Tuesday.
"Last quarter, net material inflation was 21 percent, while the price hike we took was only 12 percent," he said, adding that they always want to optimise all levels of cost and drive it down as far as possible as they go to consumers with low incomes.
Talking about the
industrial production data showing a decline in the consumer non-durable sector, Mehta said that for the FMCG sector there is still headline growth, but there is the issue of volume growth.
"Headline growth is in mid-single digits, while volume growth is in negative single-digits," he said, adding that it is again something that isn't counter-intuitive as people lower consumption when there is a price rise.
He believes that if inflation comes down, he sees no reason for volume not going up.
CNBC-TV18 asked Mehta about HUL's preparations and expectations of the for the upcoming festive season. He said that certain categories do get a big boost for HUL during the season. Giving an example, he said, "Ice-cream is a big hit in the eastern part of the country where Pujo is celebrated. We have launched a Nolan jaggery-based ice-cream. I urge you to have it, it is absolutely delicious," he said.
On if any improvements are needed on the National Logistics Policy, Mehta said that it is too early to comment on it as the fine print is awaited. "Logistics cost in India was 400 to 500 bps higher than the peer group. We are glad that the Prime Minister came out with a multi-ministerial Logistics Policy, which will bring down costs," he said.
PM Narendra Modi recently launched the national logistics
policy, which seeks a unified regulatory environment for end-to-end logistics services and an overarching institutional framework that will govern the logistics sector.
