Unilever set to raise prices by 10%
By Feng Jianmin |
May 26, 2011, Thursday
|
Print Edition
Print Edition
SHANGHAI supermarkets have confirmed that Unilever China plans to raise the price of some personal care products by as much as 10 percent.
This comes less than three months since the consumer product giant suspended hikes under pressure from pricing authorities.
Prices of Lux and Hazeline shampoo, body wash and skin moisturizers are set to increase between 4 and 10 percent, supermarkets said.
CP Lotus Corp and Metro said they have already implemented the price rise, while Carrefour, Wal-Mart and China's NGS said they are waiting to see market reaction.
Unilever China declined to comment.
Other Unilever products and those by other major personal care producers, such as Procter & Gamble, Zhejiang-based Nice, and Guangdong-based Liby, are not affected by the increase, according to supermarkets.
Supermarkets and shopping malls in Guangzhou, Guangdong Province, have also been advised of the price hike, the Guangzhou Daily reported yesterday.
Rising costs in crude oil and domestic logistics have increased pressures on consumer product makers, said Yu Xueling, secretary-general of the chamber of commerce of consumer products of Guangdong.
Some web users accused Unilever of disregarding consumers' interests, while others were more concerned about the rising energy prices that underlie the price hikes.
"The price authority's control will not be effective if it keeps ordering hikes in domestic oil and electricity prices" was one of the comments.
Three weeks ago, China's top planning agency fined Unilever China 2 million yuan (US$308,000) for "seriously distorting market order." The company was accused of causing panic buying by spreading rumors about potential price rises in late March.
On April 1, Unilever notified retailers to raise prices of several types of soap, detergents, and shampoo by as much as 15 percent.
However, the plan was later suspended under pressure from price authorities.
P&G, Liby and Nice were all reported to have planned price hikes in early April, though they were dropped for similar reasons.
Unilever's brands in China include Dove and Lux personal hygiene products, Lipton tea and Omo washing detergent.
According to figures Unilever supplied to the National Development and Reform Commission in 2010, its brands had a market share of 12 percent for shampoo, 12.6 percent for body wash products and 15.2 percent for detergents.
Meanwhile, food and drinks companies are introducing covert price hikes through reducing contents or changing packages, according to media reports.
The net weight of some type of chips by Oishi and Lay's were found to have decreased from 120 grams to 110 grams, while content of some canned beer shrank from 355 milliliters to 330 milliliters, Shanghai TV News reported.
Food companies cited rising raw material prices and growing labor costs as justification for reducing contents of their foodstuff, according to the report.
"Administrative controls on prices may cause a shortage of supply as companies will lose the incentives to produce," said Chen Zhao, vice director of China Center for Economic Studies of Fudan University. "Or the companies will find other ways to secure profits."
This comes less than three months since the consumer product giant suspended hikes under pressure from pricing authorities.
Prices of Lux and Hazeline shampoo, body wash and skin moisturizers are set to increase between 4 and 10 percent, supermarkets said.
CP Lotus Corp and Metro said they have already implemented the price rise, while Carrefour, Wal-Mart and China's NGS said they are waiting to see market reaction.
Unilever China declined to comment.
Other Unilever products and those by other major personal care producers, such as Procter & Gamble, Zhejiang-based Nice, and Guangdong-based Liby, are not affected by the increase, according to supermarkets.
Supermarkets and shopping malls in Guangzhou, Guangdong Province, have also been advised of the price hike, the Guangzhou Daily reported yesterday.
Rising costs in crude oil and domestic logistics have increased pressures on consumer product makers, said Yu Xueling, secretary-general of the chamber of commerce of consumer products of Guangdong.
Some web users accused Unilever of disregarding consumers' interests, while others were more concerned about the rising energy prices that underlie the price hikes.
"The price authority's control will not be effective if it keeps ordering hikes in domestic oil and electricity prices" was one of the comments.
Three weeks ago, China's top planning agency fined Unilever China 2 million yuan (US$308,000) for "seriously distorting market order." The company was accused of causing panic buying by spreading rumors about potential price rises in late March.
On April 1, Unilever notified retailers to raise prices of several types of soap, detergents, and shampoo by as much as 15 percent.
However, the plan was later suspended under pressure from price authorities.
P&G, Liby and Nice were all reported to have planned price hikes in early April, though they were dropped for similar reasons.
Unilever's brands in China include Dove and Lux personal hygiene products, Lipton tea and Omo washing detergent.
According to figures Unilever supplied to the National Development and Reform Commission in 2010, its brands had a market share of 12 percent for shampoo, 12.6 percent for body wash products and 15.2 percent for detergents.
Meanwhile, food and drinks companies are introducing covert price hikes through reducing contents or changing packages, according to media reports.
The net weight of some type of chips by Oishi and Lay's were found to have decreased from 120 grams to 110 grams, while content of some canned beer shrank from 355 milliliters to 330 milliliters, Shanghai TV News reported.
Food companies cited rising raw material prices and growing labor costs as justification for reducing contents of their foodstuff, according to the report.
"Administrative controls on prices may cause a shortage of supply as companies will lose the incentives to produce," said Chen Zhao, vice director of China Center for Economic Studies of Fudan University. "Or the companies will find other ways to secure profits."
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