Brazil's Hypermarcas sees more consumer price hikes in July
SAO PAULO, April 27 (Reuters) - Brazil's Hypermarcas SA plans to raise prices in July on its consumer goods lineup for the second time this year, after gauging the impact of a stronger dollar on its costs, Chief Executive Claudio Bergamo said on Monday.
Higher prices will keep pressure on consumer inflation, which rose over 8 percent in the 12 months through March to its highest in over 11 years, and test the ability of Hypermarcas to keep gaining market share amid slumping household demand.
Brazil's biggest generic drugmaker already raised prices for its hygiene and beauty care portfolio by an average of 8 percent this month, but Bergamo told analysts on a call that the price hike had not factored in the current exchange rate.
The Brazilian currency tumbled around 17 percent against the U.S. dollar in the first quarter to a nearly 12-year low, but has rebounded almost 10 percent this month.
"We need to see where the exchange rate stabilizes," Bergamo said on the conference call to discuss first-quarter earnings.
"We need to wait a bit, but over the course of the second quarter we'll have better visibility. Then we'll decide on the next price increase starting in July," he added.
Bergamo also reaffirmed that Hypermarcas would pass along to consumers a higher industrial tax rate, known as IPI, on some cosmetics, which the government announced earlier this year in an attempt to close a federal budget gap.
"The whole (cosmetics) industry will entirely pass on the IPI increase to the price of products," Bergamo said, adding that its market-leading lineup of nail polishes could actually win market share compared to more expensive rivals.
On Friday, Hypermarcas reported that first-quarter profit was little changed from a year earlier, as higher sales from more aggressive pricing were offset by higher costs. (Reporting by Luciana Bruno and Brad Haynes; Editing by Chris Reese)
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