Beijing to investigate price gouging after rumours spark panic buying

In a further bid to contain inflation, the mainland's top planning agency has launched an investigation into several companies that allegedly raised prices to exploit consumers, state media reported.

The National Development and Reform Commission (NDRC) said it had called executives at the companies concerned and told them the government would not tolerate any unreasonable price rises.

It would not tolerate any price collusion among companies or any acts aimed at pushing up prices, China Radio reported on its website, citing an unnamed planning official.

The move came a few days after rumours that the companies would raise prices at the beginning of next month caused panic buying in Shanghai and to a lesser extent in Beijing and other mainland cities.

State media began reporting late last week that the four consumer-goods companies that dominate the market for detergents - Unilever, Procter and Gamble, Guangzhou Liby Enterprise Group and Nice Group - were expected to increase prices by 5 per cent to 15 per cent next month.

Taiwanese instant noodle giant Tingyi also said it would raise prices for its signature Master Kong instant-noodle brand by about 14 per cent next month.

The news resulted in widespread panic buying as shoppers cleared supermarket shelves of soap, laundry detergent, shampoo and instant noodles, highlighting public alarm over rising inflation despite government attempts to control it.