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March 28, 2011

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Price hike investigation begins

SHANGHAI'S price bureau has launched an investigation into price hikes for household and personal care products, after reports of panic buying.

This comes as the commerce commission issued an urgent notice over the weekend requiring supermarkets to ensure they have sufficient supplies to meet demand.

"We have told local supermarkets to make sure they have enough stock and to get it on the shelves," Chen Yuxian, an official with the Shanghai Commission of Commerce, told Shanghai Daily yesterday.

Shoppers were reported to have rushed to hypermarkets over the past few days, stocking up on daily necessities.

This followed media reports that said the price of products - including washing powder, shampoos and soap - from producers including Procter & Gamble and Unilever will rise by up to 15 percent next month. The companies have since confirmed that prices will increase.

"The situation has returned to normal and consumers need not worry," Chen insisted.

The Shanghai Morning Post reported over the weekend that the city's price bureau, the Shanghai Development and Reform Commission, is investigating the matter.

Under anti-monopoly regulations, companies that team up to fix prices face heavy punishments. China's Price Law also forbids price fixing by fabricating news of a potential price rise.

Two weeks ago, Spain fined consumer goods firms, including P&G, L'Oreal and Henkel, a combined 50 million euros (US$69.8 million) for fixing prices over 20 years.

"Sales of major consumer goods are stable at our outlets and we're still waiting for the price adjustment notice from headquarters," a Carrefour communications official told Shanghai Daily yesterday.

Domestic brands, such as Guangdong Province-based Liby and Zhejiang Province-based Nice, have raised prices by 5-15 percent, Guangzhou, Chongqing and Sanya media reported last week. Procter & Gamble, Unilever, Liby and Nice Group together command about four-fifths of China's market share in their lines.

The companies have cited higher raw material costs for their price increases.


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