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Aarati Krishnan

USERS of the major brands of shampoo have been given considerable cause for cheer in the budget. The budget has halved the excise duty on shampoos from 32 to 16 per cent. Though the abatement granted to manufacturers on this product for the purpose of computing excise duty has been reduced from 50 to 40 per cent, consumers can still look forward to a net reduction of the selling prices of shampoos.

As a result of the sops handed out in the budget, marketers stand to save 6.4 per cent of the selling price of each brand. Both the major companies in the business -Hindustan Lever and Procter&Gamble have tried to pass on the entire benefit to consumers through price cuts.

P&G has announced reductions of exactly 6.4 per cent on the MRP of most packs of Pantene and Head & Shoulders. Hindustan Lever has announced a 6.4 per cent reduction in the MRP of Clinic Plus 300 ml, from Rs 125 to Rs 117. The price cuts on Clinic Plus Family Pack and Sunsilk have been of a slightly higher order, with the MRP pegged down by around 6.7 per cent.

While users of the larger packs and bottles of shampoo may find their purchases lighter on the purse, users of sachets may have reason for complaint. Both HLL and P&G have chosen to leave the MRP of their sachet packs unchanged after the budget, citing coinage issues. Since sachets are usually retailed at either 50 paisa or one rupee, Rs 2 or Rs 4, manufacturers obviously feel that they would like to avoid complicating matters by pegging the prices up by 6.4 per cent, resulting in an odd price point.

But with most brands trying to rope in new users through sachet packs, for most brands of shampoo, sachets already cost much less on a per ml basis than the bottle version. This could be another reason for the marketers reluctance to cut prices.

Hindustan Lever has also announced that the MRPs in respect of packs where there are promotional offers (especially where the promotional offer already results in a discount of more than 6.4 per cent on the MRP), will remain unchanged despite the budget. For consumers, it may be a good idea to re-evaluate any promo against the savings due to the price cut, before making a purchase decision.

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