Sat, May 07, 2011 - Page 10 News List

China fines Unilever for talking about price hikes

AP and Bloomberg, BEIJING

China has fined consumer products maker Unilever for talking to Chinese media about possible price hikes that triggered a rush to buy while Beijing is trying to rein in surging inflation.

The British-Dutch company was fined 2 million yuan (US$308,000) for “spreading information about price rises and disrupting market pricing order,” the Cabinet’s planning agency said yesterday.

Chinese authorities have told companies to hold down price increases to help cool inflation that spiked to a 32-month high of 5.4 percent in March. The government has declared taming inflation its priority and has raised interest four times since October and imposed lending and investment curbs.

Unilever is accused of violating orders to makers of noodles, liquor and hygiene products such as soaps to avoid talking publicly about prices, according to the statement by China’s National Development and Reform Commission (NDRC).

A woman who answered the phone in the press office of Unilever’s China headquarters said it was preparing to issue a statement.

Chinese authorities are trying to cool public expectations of high price rises in coming months.

They worry such expectations might fuel a spiral in higher living costs by prompting retail price hikes and higher wage demands.

The planning agency said Unilever managers were accused of talking to reporters from Xinhua News Agency and Chinese business newspapers about prices. It said reports published by those outlets triggered a “buying rush” in some markets.

The government also warned food and beverage maker Tingyi (Cayman Islands) Holding Corp (康師傅控股) against “excessive” price increases.

Tingyi in March said it postponed plans to raise prices of its Master Kong (康師傅) brand instant noodles.

“We will follow the instructions by the government to make inflation stable,” Tingyi chief financial officer Frank Lin (林清棠) said in a telephone interview.

“Although our gross margin will be squeezed, we’ve decided to suspend,” Lin said.

Consumer prices in China jumped 5.4 percent in March, the biggest increase in 32 months, and have gained by more than the government’s 4 percent target every month this year.

“Potential price increases in the future will depend on commodities prices, which have shown some signs of easing lately,” Lin said.

China is also studying rules to control property developers’ profits to keep home prices at a reasonable level, according to the statement from the NDRC.

This story has been viewed 1861 times.

Comments will be moderated. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned.

TOP top