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Prices of household products seen rising as ingredient costs increase

Shoppers can expect higher prices as the makers of toothpaste, soap and other everyday household products see their profit margins pinched by rising ingredient costs.

Both Procter & Gamble Co. and rival Colgate-Palmolive Co. reported lower profits Thursday and posted revenue below Wall Street expectations for the last quarter, sending their stocks sliding. They both said commodity costs are rising more than expected.

P&G said it is facing $1 billion in added costs for the year, double what it anticipated.

P&G, which counts Pampers diapers, Gillette shavers and Crest toothpaste among its major brands, said fast-rising costs for product-making materials and fuel likely will mean some price increases, with hikes already planned for its Duracell batteries in March.

Colgate-Palmolive President and CEO Ian Cook said the price increases would run 1 to 2 percent and would be "appropriate."

Consumers can expect to see not only household-product makers but also beverage, food and other companies try to pass along price increases, said Jack Russo, an Edward Jones analyst. That will test whether consumers are feeling confident enough about the economy to pay higher prices for their favorite brands.

"That's the million-dollar question," Russo said, adding that P&G and Colgate are better positioned than many consumer companies because of their solid reputations and relationships with retailers, along with their strong presence in emerging markets that are growing faster than sluggish developed countries.

P&G shares fell $1.93, or 2.9 percent, to close at $64.18. Colgate shares dropped $2.61, or 3.3 percent, to $77.39.

Materials that P&G uses and that are jumping in price include palm oil for beauty products, wood pulp for paper towels and tissue, and resin for packaging.

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