everything will be expensive

New Delhi: There is no good news for the common man battling inflation. The cost of daily use items like soap, toothpaste and shampoo may increase. Hindustan Unilever Limited (HUL), a leading company that manufactures many consumer goods like Rin, Lux, Lifebuoy, Fair and Lovely, Horlicks, may increase the price of its products. The company said that its parent company Unilever Plc has increased royalty fees by 80 basis points. This increase will be implemented in a phased manner over three years. Unilever has increased royalty fees for the first time in ten years. Earlier, the company had increased it in the year 2013.

HUL said that as per the new agreement, royalty and central services fee has been increased to 3.45 per cent. It was 2.65 per cent in the last financial year. HUL’s revenue in the last financial year stood at Rs 51,193 crore, which is 11.3 per cent higher than a year ago. Out of this, the company paid a royalty fee of 2.65 per cent to its parent company. The 80 bps increase in royalty fee will be implemented in three phases. This will increase HUL’s royalty fee by 45 bps for February to December 2023. Similarly, it will increase by 25 bps in 2024 and 10 per cent in 2025.

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This is considered negative for HUL. The reason for this is that the company has not yet been able to achieve a strong recovery in sales and volumes. Common people facing the brunt of inflation can refrain from spending on expensive items. This may affect the revenue of the company. On Thursday, the company’s stock closed at Rs 2,643.05, down 1.6 per cent on the NSE. The royalty agreement gives HUL the right to use Unilever’s trademarks, technology, corporate logos. Unilever plc is a UK based company.

HUL has many well-known products including food, homecare, personal care and water purifiers. These include Annupurna Salt and Flour, Brew Coffee, Brooke Bond Tea, Farmers Ketchup, Juices and Jams, Lipton Tea, Knorr Soup, Quality Wall Ice Cream, Horlicks, Wheel, Rin, Surf Excel, Vim, Clinic Plus Shampoo, Dove, Lifebuoy, Denim Shaving creams include Lakme, Lux, Pepsodent, Rexona, Sunsilk and Pureite.