Dusseldorf, March 25, (dpa/GNA) – Rising prices for household goods due to the war in Iran are inevitable, the head of German consumer goods giant Henkel said on Wednesday.
“If our manufacturing costs rise dramatically, we will have to pass these costs on,” said chief executive Carsten Knobel in an interview with the Handelsblatt business newspaper.
“It doesn’t help to wait too long before raising prices,” he argued. “The later you react, the greater the pressure you come under.”
The conflict is largely affecting Henkel indirectly, through rising costs of materials and supply chains.
The rising oil price, a result of Iran’s blockade of the key Strait of Hormuz, is hitting suppliers and logistics companies hard in some cases, the chief executive said.
“They are passing on part of their increased costs to us,” said Knobel. “We naturally hope that this war will not last the whole year.”
Henkel produces well-known goods including laundry and dishwashing detergents such as Perwoll and Pril, cosmetics and personal care products, as well as adhesives.
The company has already raised the prices of its products in recent years.
“If you want to convince customers to pay more, you have to offer a clear benefit,” said Knobel. He sees a trend towards retailers’ own-brand products.
“Nevertheless, there is strong loyalty to branded products such as Persil or Schwarzkopf,” he said. “People may use the products a little more sparingly, but they will continue to buy them.”
The Dusseldorf-based company was founded in 1876 and employs around 47,000 people worldwide, of whom fewer than 20% work in Germany.
Last year, Henkel generated turnover of around €20.5 billion ($23.8 billion).
GNA