Sunday, February 22, 2009

P&G expects to hold the line on price hikes

This looks likely to be one of a long series of posts on the Great CPG Price War of 2009. First there was this, in which I speculated that perhaps the price hikes are a hedge against uncertain economic conditions (following the model of the '70s). Then we discussed the Delhaize-Unilever spat.

Now we have P&G's CEO A.G. Laffey saying that the price increases his company put through last year will stick.

"Our products don't deliver value [just] because the prices on the shelves are lower," A.G. Lafley, chief executive of Procter & Gamble Co., told analysts and investors at a conference here.

Like several other industry executives who spoke at the event, Mr. Lafley said his company doesn't plan to roll back the significant price increases it has made over the past several months.

There also is a report in the article that Safeway suspended shipments from P&G in late December, but that appears to have been an inventory decision, rather than part of the pricing fight.

Executives from Clorox, Nestle, and Kimberley-Clark are also quoted as saying they will hold on to their price hikes.

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