Danone and Nestle, the leading consumer goods companies, said on Thursday that they will slow price rises in 2024, following two years of hikes that pushed many buyers to seek cheaper alternatives for essential items such as yoghurt and coffee.
However, Danone, which owns brands such as Evian and Badoit waters and Activia yoghurt, warned that prices will continue to climb, citing the need to balance labour and shipping expenses.
Nestle said freight prices are having a smaller impact than in recent years, however there has been some tension from attacks on ships in the Red Sea.
Their comments come after British competitor Unilever, the creator of Ben & Jerry’s ice cream and Dove soap, said this month that price rises, which have fueled a chronic cost of living problem, will begin to lessen.
To justify increased pricing, the packaged products sector has claimed increases in input costs that began with the Covid-19 epidemic, which disrupted global supply lines and were worsened by Russia’s invasion of Ukraine two years ago.
As everything from sunflower oil to commodities has gotten more costly, tensions between merchants and consumer goods corporations have grown. Governments have chastised the price increases and some of the firms involved, most notably France.
Concerns that corporations are pushing price increases too far, particularly when the cost of living problem allows retailers’ private label brands to gain market share, have prompted some investors and analysts to advocate for an emphasis on marketing and innovation.
With many consumers swapping costly branded goods for cheaper alternatives, Unilever CEO Hein Schumacher said earlier this month that his company’s “competitiveness remains disappointing”.
This quarter, however, corporations have stated that prices will climb at a considerably slower rate in 2024 as they recover more expenses.
Overall inflation rates have declined dramatically, and many central banks are likely to begin reducing interest rates this year.
