The price war between the two FMCG giants Hindustan Lever Ltd and Procter & Gamble has intensified with P&G slashing the prices of its shampoo brand Pantene.

It is cutting the prices of Pantene bottles by 15-20 per cent and is expected to announce on Thursday the launch of a new variant under the Pantene brand. The objective is to create a new segment focusing on preventing hair loss.

A fortnight ago, Hindustan Lever had announced a promotional offer of a free bottle with every bottle of Sunsilk and Clinic Plus. In other words, it resorted to a 50 per cent price cut.

Hindustan Lever executives earlier said depending upon the success of this initiative, the company would firm up its pricing strategy for its shampoo brands.

A trade source said, "P&G is cutting prices of its Pantene (bottles) by 15-20 per cent but leaving its Head & Shoulders and Rejoice brand untouched for the time being." Pantene is positioned against HLL's Sunsilk.

Pantene is now priced at Rs 61 for a 100 ml bottle, Rs 117 for a 200 ml bottle and Rs 197 for a 400 ml bottle. Sunsilk is priced at Rs 55 for 125 ml, Rs 100 for 250 ml and Rs 150 for 400 ml. The price actually gets halved as one bottle is given free with every bottle sold.

Market sources pointed out that HLL is set to face more competition as P&G's other two shampoo brands -- Head & Shoulders, Rejoice -- are also likely to undergo price revisions in the near future.

The HLL-P&G price war first started on the detergents front. P&G fired the first salvo by cutting the prices of big packs of Ariel and Tide. HLL followed suit immediately by slashing the prices of Surf Excel and Surf Excel Blue.

Hindustan Lever is the market leader and commands a share of over 50 per cent in the shampoo market. HLL's shampoo brands are Clinic Plus, Sunsilk, Clinic All Clear, Lux and Ayush.

The shampoo business of P&G has a market share of over 15 per cent. The other major player in the category is the south-based CavinKare with brands like Chik and Nyle.

CavinKare executives had also said that the company may look at a price cut strategy to maintain its position in the market.

According to analysts tracking the FMCG sector, after witnessing an increase in 2001 and 2002, the shampoo market declined by 5.2 per cent in 2003 in volume terms.

For the month of January 2004, the segment declined by 5 per cent. Of the total shampoo market, sachets constitute over 70 per cent of the market.