Rivals Unilever and Procter & Gamble (P&G) are set to raise the prices of all their detergent powder and tablet brands by 4.7 per cent.
The decision has angered some smaller retailers. They say they are unlikely to absorb the price increases, unlike Tesco and Asda, which resort to the EDLP (every-day-low-pricing) policy.
Last year P&G was caught in a price hike climb-down after retailers refused to comply with the increase.
The move is expected to come into force next month. Unilever’s UK subsidiary Lever Fabergé is understood to be following suit in March. P&G brands include Ariel, Daz and Fairy, while Lever Fabergé owns Surf and Persil.
The price hike is understood not to affect the capsule formats. One industry insider explains: “This will be a win-win situation for both companies. If there is a price hike on powder and liquid detergents, consumers are likely to be driven to buy more capsules.”
Another industry expert sees the move as an attempt to squeeze extra value from the huge market share that P&G and Unilever enjoy. “If the big rivals decide to introduce a price hike, there is little that can be done to reverse the decision.”
P&G marketing director for fabric and homecare Mark Brickhill says: “Our last price increase was over four years ago and since then we have introduced 14 major product improvements across our brands. All these come at a price. Despite this, we have been able to hold the price increase to a level below inflation.”