After toiletries manufacturer Kimberly Clarke notified Israeliretailers of a 10% increase in the prices of its paper goods, sources inform "Globes" that Sano-Bruno Enterprises Ltd. (TASE: SANO1) will notify the retail chains tomorrow that it is also raising prices for its paper goods. Consumer prices will go up early next week for products such as toilet paper, paper towels, and facial tissues. Sano's brand in these categories is called Sano Soft. It is believed that retailers will up their prices by 9-12%. Kimberly Clarke's corresponding important brands are Lily, Molett, and Nikol.
The supermarket chains indicated that Sano was raising its prices for the first time since the 2011 social protest.
Why are the suppliers raising prices? Kimberly Clarke says that prices of raw materials have risen, headed by a 50% increase in paper pulp prices starting in January 2018, and are still going up. All of the large customers in the market have already confirmed the increase for June.
Sano refused to comment on the complaints, saying, "The company's business matters are managed directly with the relevant parties."
According to StoreNext figures, Kimberly Clark's share of the consumer products market in monetary terms in the first third of 2018 was 2.4%, 0.1% higher than in the corresponding period last year. Sano's market share was 2.7%, 0.1% less than in the corresponding period last year.
The increase in sales in monetary terms extends to the entire market; the market for all consumer products grew nearly 3% in monetary terms in the first third of the year, amounting to NIS 284 million in additional sales. Price increases were also a universal phenomenon; StoreNext's price index rose 0.7%. Up until now, this has been attributed to a switch to premium products. In the case of Kimberly Clark, however, the prices of basic products are being raised.
Kimberly Clark Israel said, "Kimberly Clark is committed to offering its consumers the best products and the best quality. Due to an unusual and prolonged worldwide rise in raw material prices, especially pulp, the most important elements in our paper goods, we are being forced to adjust the sale price for retailers of the paper brands. In the three main brands (Lily, Molett, and Nikol), we left the price to the retailer for a double roll product unchanged. We wish to emphasize that even after the change in the price for retailers, Kimberly Clark is still bearing the cost of most of the increase in raw material prices. This revision will be implemented in June 2018. The final consumer price will be determined solely by the retailers."
Published by Globes [online], Israel business news - www.globes-online.com - on May 30, 2018
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