Detergent price wars: P&G cuts prices of Tide Naturals

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Detergent price wars: P&G cuts prices of Tide Naturals

P&G has taken the next step in the laundry segment battle with Hindustan Unilever. The FMCG giant has implemented a further drop in tide natural prices by increasing the grammage of the pack, reports CNBC-TV18’s Tanvi Shukla.

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Proctor & Gamble (P&G) has taken the next step in the laundry segment battle with Hindustan Unilever (HUL). The FMCG giant has implemented a further drop in Tide Naturals prices by increasing the grammage of the pack, reports CNBC-TV18's Tanvi Shukla.

P&G has decided to make their product Tide Naturals cheaper by about 20%. Market experts are expecting HUL to retaliate through a price reduction in Rin. Sources told CNBC TV18 this price reduction of 20% has happened for Tide and Tide Naturals. This is via two methods. One is through price cuts and the other is grammage increase.

When contacted, P&G confirmed to CNBC-TV18 that the grammage of Tide Naturals had been increased by 25% and the shipment of this stock had already been sent off. This stock is expected to reach the stores within the next ten days, which means if you are buying a Tide Naturals pack of 500 grams for about Rs 50, for the same amount you would now get 620 grams. So, with no change in the price point itself, it effectively does translate into a price reduction considering that consumers are getting more out of the same price.

HUL on the other hand has undertaken indirect price hikes in Lux. The price hike is via a grammage cut for Lux. The move is to pass on the excise duty hikes levied in the Budget. The earlier 125 gm bar of Lux has been reduced to a 90 gram bar. The company has reduces the Lux price by Rs 3 to Rs 15 per pack.

Analysts are of the view that this move by P&G was expected considering HUL had slashed prices by 15-30%. They don't see a brutal war like the one earlier in 2004, but they are slightly concerned about the margins.