Vice Premier Jiang Yi-hua (江宜樺) yesterday warned an infant-formula producer that it could be fined up to NT$25 million (US$837,000) “if it raises prices irrationally.”
Abbott Taiwan is reportedly planning to raise prices by 6 or 7 percent beginning July 1, prompting Jiang, who leads a Cabinet-level price stabilization task force, to call a press conference to declare the government’s determination to fight price increases.
“There is no reason to raise milk powder prices once again, because there has already been a wave of price increases of infant formula from September to November last year,” Jiang said.
The government halved import duties on baby milk powder from Nov. 25 to May 24 to reduce the burden on businesses, but not only have businesses failed to appreciate the show of goodwill by the government by lowering prices, they are instead planning to raise prices, Jiang said.
Jiang said he had instructed concerned government agencies to be on alert for changes in prices to stem irrational increases.
The Fair Trade Commission has issued letters of warning to businesses and the government would not rule out initiating tax probes to combat unjustifiable price increases, he added.
According to the information on the Web site of the Consumer Protection Commission, Abbott Taiwan plans to raise the prices of four types of infant formula on July 1 to reflect cost increases.
The company said that the prices of select products have remained unchanged since March 2010, while raw material costs for milk powder and aluminum cans have increased by 8 percent.