Unilever price rises weeks after fine

PUBLISHED : Thursday, 26 May, 2011, 12:00am
UPDATED : Thursday, 26 May, 2011, 12:00am
 

Consumer product giant Unilever, whose brands include Lux and Dove soaps and Sure deodorants, reportedly raised prices on some personal care products only a few weeks after the state pricing regulator fined it for talking about price increases.

Retailers in Guangzhou on Tuesday received price-rise notices from Unilever and put up prices on some products by 10 per cent, the Guangzhou Daily reported yesterday.

A number of retailers in supermarkets and department stores in the southern city told the newspaper that they had received the notices, with one local supermarket saying it raised the price on Unilever's Lux and Hazeline brands of shampoo and shower gel by 10 per cent.

Unilever China's Corporate Affairs Department refused to comment on the report. 'We are not delegated to comment on market prices, as stimulated by the company's internal rules,' said a spokeswoman, who gave her surname only as Zheng.

The supermarket was going to put up prices on April 1, but was instructed by Unilever to postpone the price rise, the newspaper reported, quoting a manager of the supermarket.

This month, Unilever agreed to pay a fine of 2 million yuan (about HK$2.4 million) imposed by the National Development and Reform Commission, the top economic planning agency. It accused the Anglo-Dutch company of 'spreading news of price rises and disturbing market order'.

Some analysts said companies such as Unilever had the right to put up prices in a competitive market. Rising costs in crude oil and domestic logistics have intensified the pressure on consumer product makers, the Guangzhou Daily quoted Yu Xueling, secretary general of Guangdong's Chamber of Commerce of Chemical Consumer Products, as saying.

Many suppliers of consumer goods on the mainland are doing all they can to bypass increasingly strict government's increasingly stringent price controls. Suppliers of milk products, soft drinks such as Coke and Pepsi, and L'Oreal facial moisturiser have rolled out smaller sizes while keeping prices steady.

The consumer price index rose 5.3per cent in April from a year earlier, exceeding the government's 4 per increase in food prices.

Rising prices have become a politically sensitive issue for the central government, which is concerned that inflation could undermine social stability.

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Unilever brands out of a total of more than 400, including Lux, Knorr, and Ben and Jerry's, each have sales exceeding US$1billion

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