Britannia Industries plans further price hikes amid food inflation impacting margins and boosting rural demand

Mumbai: Britannia Industries is considering more price increases as persistent food and commodity inflation puts pressure on margins as demand shows signs of recovery in rural and semi-urban markets.

The maker of Good Day biscuits raised prices by 3.5% in the September quarter, but said the increase only partly offset higher costs. The company also faces intensifying competition from regional players and new entrants such as Reliance Industries, which began selling biscuits in Tamil Nadu.

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"In the biscuit market, a large part of the market operates at Rs 5 and ₹10. So, the ability to disrupt those two price points in the biscuit market is much more difficult than you can do in a Cola market by discounting by ₹5 or ₹10," CEO and MD Rakshit Hargave said. "But that said, obviously, Reliance is a very respectable competition and we will watch carefully."

The pricing push comes amid elevated costs across key commodities. Refined palm oil prices are up 17% year-on-year, milk 16%, sugar 6% and packaging laminate 18%. Wheat flour was up 9% sequentially, while fuel costs were 45% higher than a year earlier.

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Hargave said inflation was "there to stay" and that further price increases were being activated. More than 60% of Britannia's portfolio operates at Rs 5 and Rs 10 price points, where increases often involve reducing pack grammage rather than changing the printed price. This makes implementation slower, taking 1.5-2 months. "The cost inflation is more than one, and this is only covered part of it. And our attempt with the subsequent increases is to close that gap," he added.

The company said it is seeing a recovery in general trade, its largest sales channel, with growth in the September quarter 2.6 times the level recorded in FY26. Hargave said the impact of last year's GST transition on the quarter's base was limited to 1.5-2%, with stronger consumption in semi-urban and rural markets playing a bigger role.

The recovery also reflects the easing of dual pricing, which had allowed competitors to sell at Rs 4.50 while Britannia continued to price products at ₹5. The company said it had regained shelf space and seen sequential market-share gains across several biscuit categories.

Hargave said the improvement was not driven by channel restocking, with sales tracking actual consumer demand and retailers returning to the brand.

The company attributed the improvement in general trade partly to sharper state-level execution under its "winning in many Indias" strategy, alongside resilient consumption.