"Having concluded price talks with retailers, FMCG market leader Unilever Hungary said it will raise prices by less than 10% on average, business daily Világgazdaság reported.In recent years, Unilever has been able to offset increasing costs by improving efficiency, however the company is now forced to hike prices to keep pace with added costs, the management said. According to Unilever, the price hike is only a fraction of the rate at which purchasing costs have increased.
A sharp price hike for vegetable oils necessitated a higher-than-average price hike for margarine, ketchup, mayonnaise and ice cream, and to a smaller degree for seasoning mixes.
With over HUF 76 billion annual sales revenue, Unilever Hungary is the leading FMCG manufacturer in Hungary, with foods generating 60% of revenue while household chemicals and cosmetics account for the remaining 40%.
Based on the figures quoted by Unilever, Portfolio.hu has made a rough estimate of how this move will impact headline inflation. While the weight of Unilever products in the consumer goods basket used in inflation calculations is not known, it is a fact that the total sales revenue of the company accounts for approximately 1.5% of retail trade in Hungary. Thus a Unilever price hike just below 10% may raise Hungary's CPI by as much as 1 to 2 percentage points, Portfolio.hu reckons."
Source: Portfolio Online Financial Journal
16.06.2008