National Development and Reform Commission

Brewers and distillers instructed to keep the lid on prices

PUBLISHED : Friday, 08 April, 2011, 12:00am
UPDATED : Friday, 08 April, 2011, 12:00am

Mainland drinkers have reason to celebrate after the country's top planning agency told brewers and distillers to keep prices in check.

It was the second time that the National Development and Reform Commission has clamped down recently.

Last week it met executives of the biggest detergent producers after rumours that they would raise prices this month caused panic buying.

The latest move by the price regulator follows concerns about liquor price rises, particularly the 20 per cent increase in the price of Maotai - an upmarket liquor - in January.

It called an emergency meeting of breweries and industry associations on March 31 to order that prices 'must remain stable in the first half of the year'.

The National Association for Liquor and Spirits Circulation said the NDRC officials had said it understood beer prices might have to increase because the industry was susceptible to rising costs. But it had criticised liquor manufacturers for repeatedly raising prices even when their costs were stable.

Also present at the meeting were executives from Anheuser-Busch, Tsingtao Brewery, China Resources Snow Breweries and the Yanjing Beer Group.

The price regulators said the industry must understand the 'serious nature' of inflation. They said that if 'the national economy and society is not stable, it is hard for enterprises to survive and develop in the long term', an association circular posted on said.

The NDRC also ordered producers to ensure sufficient supply and inform the government before any price increases - which must not exceed rising production costs.

Any price collusion would not be tolerated.

On the same day, meetings were also held with senior executives from major liquor brands such as Maotai, Wuliangyie and Luzhou Laojiao, to relay price regulators' orders.

The companies were either unavailable or declined to comment on the meetings.

The detergent frenzy started more than a week ago when state media began reporting that the four companies that dominate the market - Unilever, Procter and Gamble, Guangzhou Liby Enterprise Group and Nice Group - were about to increase prices by 5 per cent to 15 per cent.

Taiwanese instant noodle giant Tingyi also announced plans to raise prices for its signature Master Kong noodles by about 14 per cent this month, earlier reports said.

The news resulted in widespread panic buying as shoppers cleared supermarket shelves of soap, laundry detergent, shampoo and instant noodles, highlighting public alarm over inflation despite the government's cooling measures.

Inflation is expected to have risen to a 32-month high in March.