New Delhi: Your daily cup of tea may soon become a little more expensive. Britannia Industries, one of India’s biggest biscuit makers, has announced plans to increase prices and reduce packet sizes as rising costs linked to the Middle East conflict begin affecting the FMCG sector.
According to the company, prices of biscuit packs costing above ₹10 are likely to rise gradually from this quarter. At the same time, Britannia plans to reduce the quantity of biscuits in lower-priced packs instead of directly increasing their retail price — a strategy commonly known as “shrinkflation.”
The company’s management said the pressure is coming from rising palm oil prices, higher fuel costs, expensive packaging materials and increased transportation charges. The ongoing tension in the Middle East has disrupted global supply chains and pushed crude oil prices higher, indirectly impacting food and FMCG companies across the world.
Britannia Managing Director Rajneet Kohli reportedly told investors during the earnings call that the company would take calibrated pricing action to protect margins. The biscuit giant earns nearly 60-65 per cent of its revenue from affordable ₹5 and ₹10 packs, making direct price hikes in rural and mass markets more challenging.
The company recently posted a 21 per cent jump in quarterly profit, but revenue growth remained weaker than market expectations due to supply disruptions and softer demand in some segments. Following the announcement, Britannia shares fell sharply in the stock market amid concerns over slowing sales and margin pressure.
Industry experts believe the impact may not remain limited to biscuits alone. If tensions in the Middle East continue, prices of several packaged food products could rise in the coming months as shipping and raw material costs increase globally.