ITC rules out immediate price hike on food items

NEW DELHI: Multi-business conglomerate ITC that makes food products under brands such as Sunfeast and Bingo today said raw material costs are likely to go up by around 3 per cent in the next 2-3 months, but ruled out any major price hike for consumers.

While stating that raw material costs are under control at present, the company said value added tax (VAT) on food items is a cause of concern.

"I believe in the next 2-3 months, input costs will go up by up to 3 per cent," ITC Foods CEO Chitranjan Dhar told reporters here.

He said the company's products are not likely to become dearer for consumers in the near future.

"We do not expect any great increase in prices barring a few exceptions...90 per cent of our products will not be impacted in terms of price hikes," Dhar added.

Commenting on VAT on food products he said : "More than the commodity prices, differential VAT rates across states are a problem."

According to analysts, prices of key food commodities such as sugar, wheat and vegetable oil have been stable for some time now.

"There is no pressure on food companies to increase product prices," Motilal Oswal Financial Services Analyst Amnish Agarwal said.