Britannia CEO Rakshit Hargave Addresses Reliance's Biscuit Market Entry and Pricing Pressures

NEW DELHI — Britannia Industries Chief Executive Officer and Managing Director Rakshit Hargave has stated that billionaire Mukesh Ambani-backed Reliance Industries will find it more difficult to disrupt India's biscuit category than the soft drinks market. The remarks were made on Friday during a post-earnings call.

The evaluation follows Reliance's expansion of its biscuit range under the Independence brand in Tamil Nadu on Monday. The rollout, featuring packs starting at ₹5, comes just days after Reliance established the biscuit segment as a focus category for its consumer business.

Reliance previously relaunched the Campa soft drinks brand three years ago, sparking a price war with global giants Coca-Cola and PepsiCo through aggressive discounting, a strategy reminiscent of its entry into the telecom sector. However, Hargave cautioned that replicating this playbook in the biscuit industry presents distinct structural hurdles.

“A large part of the market operates at ₹5 and ₹10, so the ability to disrupt those two price points... is much more difficult than you can do in a cola market by discounting by ₹5 or ₹10,” Hargave explained during the call.

Despite the structural limitations of aggressive pricing in low-ticket items, Hargave noted that the maker of Good Day biscuits remains watchful of competition from Reliance, whose biscuit offerings mirror existing products currently available in the market.

Industry observers share a similar perspective. A. Manikandan, founder of Tiger Consulting, noted that at the ₹5 and ₹10 price points, there is very limited room for aggressive price reductions without directly compromising profitability.

Alongside addressing competitive pressures, Britannia addressed its own internal pricing strategies. The company announced plans to further raise prices and reduce pack sizes to ease margin pressure caused by rising commodity costs linked to the Middle East conflict.

Britannia has been dealing with escalating expenses for essential raw materials, including wheat flour, palm oil, and sugar. In response to these cost pressures, the company previously raised prices by 3.5% in the second quarter and decreased pack sizes during the first quarter.

"The entry of a major conglomerate like Reliance into the FMCG sector introduces intense competition, particularly in mass-market categories. However, as Britannia's leadership points out, low-priced staple items like biscuits operate on tight margins where deep discounting is difficult to sustain without hurting profitability. Established players with strong supply chains and brand loyalty will rely on operational efficiency and agile pricing strategies to navigate both rising commodity costs and new competitive pressures." — Dr. Shishir Gupta, Founder & CEO, StartupLanes