P&G in price hike climbdown

Procter & Gamble has been forced to put on hold plans to increase the prices of all its detergent brands, after retailers refused to comply with the increase.

The 4.7 per cent price rise on the Ariel, Daz and Fairy brands was initially intended to take effect from September 30 (MW August 1), but it is now not expected until next year.

Industry insiders say that P&G has postponed the increases until January 17, because retailers do not want to charge more for detergents during the pre-Christmas period.

One retailer says: “Price hikes are never welcomed by retailers, but it becomes more difficult during the run-up to Christmas. When P&G announced the September price rise, it expected Unilever to follow. That did not happen.”

Another retailer adds: “There is no justification in the proposed price hike and, like most retailers, we had to refuse the increased prices.”

At the time of P&G’s announcement, Unilever – which owns Surf and Persil – said that it had no plans to follow suit.

P&G’s planned price increases were thought to have been an attempt to squeeze extra value from the company’s huge market share. According to Mintel, P&G dominated the overall detergent market in 2001, taking a 50 per cent share of sales by value.

According to a P&G spokeswoman, the company does not discuss details of its pricing policies.