Kimberly's move follows a similar decision by archrival Procter & Gamble
Meanwhile, Canada's privately held Kruger, which owns Scott Paper and markets bargain-brand Scotties tissues in the U.S., has not announced yet whether it will follow suit. Nor has Brawny and Northern brands-owner Georgia-Pacific
Until these two latter companies break their silence, we would seem to have here a situation in which the two goliaths of the personal hygiene world are handing their rivals market share on a silver platter (or a paper plate, perhaps?).
True, Kruger and Georgia-Pacific must pay the same higher energy costs to transporters such as Kinder Morgan
Unlike Kimberly and P&G, Kruger and Georgia-Pacific have extensive forestry and pulp-manufacturing operations. Logically, these operations offer the latter two companies a considerable buffer against the kinds of raw material costs that prompted the price increases already announced by Kimberly and P&G.
Thus, the savings on these raw materials should give Kruger and Georgia-Pacific a considerable edge over their rivals. Kruger and Georgia-Pacific can stand pat on their current prices. Or they can match Kimberly's and P&G's price hikes and rake in the profits. Or they can raise prices less than their rivals, use that as a means of increasing market share, and yet still increase their profits.
As prospects go, those are nothing to sneeze at.
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Fool contributor Rich Smith owns no shares in any of the companies mentioned in this article.