The Guangdong government has ordered hypermarket operators to stop selling home appliances and mobile phones at below cost. In its first step to take the heat off an intensifying price-war triggered by rivalry between domestic and foreign operators, Guangdong Price Bureau said it would take disciplinary action against rule breakers. Violators will be fined between 30,000 yuan (about HK$28,155) and 300,000 yuan, according to one retailer who attended the meeting called by the bureau on Tuesday. About 40 leading domestic and foreign retailers, including Hong Kong-based ParknShop and China Resources Vanguard Department Store, French-based Carrefour and mainland home appliance retailer Gome Electronics attended the meeting. China Resources Vanguard, ParknShop and Gome are using aggressive price-cutting to grab market share in southern China's highly competitive retail sector. The bureau warned retailers they should not offer discounts or refunds to customers if it led to them suffering a loss. China Resources Enterprise, which controls China Resources Vanguard, was unavailable for comment yesterday. A spokesman for A S Watson, parent company of ParknShop, said it had not started the price war but was forced to follow suit as it offered a 'lowest price guarantee'. The company would keep in close touch with provincial and local governments and do its best to meet their requirements. Wang Junzhou, general manager of Gome Electronics' Shenzhen and Guangzhou branches, said the company had not sold products below cost, even when it had sold rice cookers for nine yuan in October. However, the group would review the government requirements, he said. Last month, the central government reportedly raised concerns over the price-cutting strategy of chain-store operators in Guangdong province. It was reported that a special unit from the State Development Planning Commission had been sent to Guangdong to investigate the price war.