Fri, Feb 29, 2008 - Page 12 News List

Carrefour mulling price hike as material costs soar

By Jerry Lin  /  STAFF REPORTER

Carrefour Taiwan (家樂福) said it was under increasing pressure to raise product prices because of soaring raw material and commodity prices.

"Many of Carrefour's suppliers have voiced their concern over soaring commodity prices, as flour and butter prices have nearly doubled," Carrefour Taiwan's public relations manager Dream Lin (林夢紹) said yesterday.

"Although Carrefour has refrained from increasing prices, it is becoming increasingly difficult to buck the trend," Lin said, adding that the company would make a decision on whether to raise prices next month.

To counter the effects of increasing costs, Lin said Carrefour would utilize its purchasing power to bargain with suppliers, along with buying products directly from upstream suppliers to save costs.

Diversifying its product lines should also help Carrefour maintain its competitiveness, Lin said.

Prices of imported corn have seen the largest increase among all commodities, surging 14.2 percent from US$233 (NT$7,206) per tonne in December, to US$266 per tonne last month, while those of wheat and soybeans increased 13.2 percent and 10.6 percent respectively, the Ministry of Economic Affairs said in a report on Feb. 21.

Minister of Economic Affairs Steve Chen (陳瑞隆) said yesterday that the government had implemented several measures to rein in soaring costs and help local businesses. These include prohibiting the export of certain products and increasing government-backed loans to small and medium enterprises from NT$10 million to NT$15 million per company to assist in their procurement of imported commodities.

The ministry had also submitted a proposal for legislative review to eliminate sales taxes -- currently tagged at 5 percent -- on select commodity imports, including wheat, barley, corn and soybeans.

Chen said that canceling the sales tax on commodity imports was just one of the government measures to help stabilize commodity prices.

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