October 9, 2018 / 8:02 PM / 2 months ago

P&G gets steel tariff exemption for Gillette, Venus razors

CHICAGO (Reuters) - Procter & Gamble Co (PG.N) was informed on Tuesday that it is now exempt from the 25 percent U.S. tariff levied on imported Japanese and Swedish steel that is used in its Gillette and Venus razor blades, a company spokesman told Reuters.

The logo for Procter & Gamble Co. is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., June 27, 2018. REUTERS/Brendan McDermid

The exemption notification, from the Department of Commerce’s Bureau of Industry and Security, came nearly four months after P&G’s biggest razor rival, Edgewell Personal Care Co (EPC.N), received an exemption. Edgewell, owner of the Wilkinson Sword and Schick brands, filed an exemption application in late March and told Reuters it was informed it was granted the week of June 18.

“There was definitely a financial impact to the company, but we haven’t disclosed any numbers,” P&G spokesman Damon Jones said of the effect of the steel tariff. Gillette and Venus are the biggest components of P&G’s grooming business, which accounted for about 10 percent of global net sales in fiscal 2018, ended July 31.

“It wasn’t materially market-moving, but given the competitiveness of this industry we think it is important and significant,” Jones said.

U.S. President Donald Trump’s administration imposed tariffs on steel imports from most countries in March, and on the European Union in June.

P&G and Edgewell both said that U.S. steel manufacturers cannot supply the high-quality grade of steel needed to make precision razor blades, obliging them to pay higher prices for steel or seek exemptions.

P&G, the world’s No. 1 personal care goods company, which has been struggling with soaring raw material and transportation costs this year, chose not to pass the 25 percent surtax onto consumers at a time of intense competition in the industry.

The company has been cutting prices at its grooming business, hoping to claw back market share from upstart shaving brands such as Harry’s and Dollar Shave Club. Like other consumer goods companies, P&G has been squeezed this year between pressure to cut prices and surging input costs.

Jon Moeller, P&G’s chief financial officer, told Reuters in August that the tariffs on steel imports were the company’s biggest trade-related concern.

A company spokesman told Reuters in July that products sold in Canada - from Febreze candles to Gillette shaving foam - would be affected by retaliatory tariffs on U.S.-made goods after Canadian authorities rejected a request for exemptions. The company has also identified more than a dozen products that could be hurt by the latest round of U.S. tariffs as tensions with China rise.

Reporting by Richa Naidu; Editing by Caroline Stauffer and Leslie Adler

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below