Household goods giant Reckitt Benckiser, known for producing health and hygiene products including brands such as Lysol, Mucinex and Durex condoms, says it will raise prices to offset higher costs caused by the Iran war, according to a report.
Reckitt plans to raise prices in North America and Europe, following similar increases in emerging markets, which have helped cushion the impact of higher costs stemming from the conflict, namely volatile oil prices that surged past $100 a barrel earlier this year.
Kris Licht, the chief executive of the U.K.-based company, told The Wall Street Journal that price increases will only affect some products.
The company also plans to take other productivity measures to help offset the cost of inflation, Licht said.
Reckitt raised prices in emerging markets earlier this year, which Licht said was effective. However, the full effects of cost inflation are yet to be seen, he said.
“There’s somewhat of a delay in some of these supply chains as the cost increases roll through,” he told the outlet. “We should see it in the next three months.”
Reckitt reported its second-quarter results Wednesday, indicating price increases in emerging markets.
Like-for-like sales in emerging markets rose 9.4 percent, 6.2 percent from price increases, according to the report. Like-for-like sales measure a company’s revenue growth by comparing sales from the same stores or products over two different periods.
Reckitt has kept its portfolio of health brands mostly protected from price increases, according to Licht, who said volumes in the segment are not as impacted by price increases.
“We oftentimes are seeing very little response, if any, on volume when we take some pricing on the health side — which is a little bit different than the hygiene business,” Licht told the newspaper.
The CEO told Reuters its operations and supply in the Middle East improved during the second quarter after the initial ceasefire between the U.S. and Iran.
“There is a headwind on cost when oil prices are up but as you’ve seen they also come down quite quickly. So it’s a manageable impact for us,” Licht told Reuters. He said that since oil prices have decreased, the company is anticipating a reduced hit from higher input costs this year.
Along with its second-quarter results, Reckitt on Wednesday launched a share buyback worth up to 500 million pounds, or $665 million in U.S. dollars.
Read MoreAverage cost of gas is back above $4 as renewed fighting in Iran war spikes prices
