Questions linger over price rises
Source: Xinhua |
March 27, 2011, Sunday
|
Print Edition
Print Edition
EXPERTS have questioned a reported move by four leading consumer product suppliers in China to raise prices of household products, urging the government to look into the matter.
In reports this month, unidentified sources said the four leading suppliers - Procter & Gamble, Unilever, Liby, and Nice Group - will raise product prices by 5 to 15 percent starting next month. The four companies command four-fifths of China's consumer product market share.
Zeng Xiwen, vice president of Unilever China operations, confirmed several companies would raise prices, but declined to name them.
According to industry analysts, spreading news of a price increase before they rise can lead to a sharp increase in sales. The news can also serve to test public reaction to a potential price rise.
Rush buying of personal care products has been reported in several cities since the news was released. Soap, shampoo and body lotion sold out in several supermarkets in Nanjing, capital city of Jiangsu Province.
Qiu Baochang, a lawyer with the China Consumers' Association, said: "Releasing news of a price rise before lifting prices undermines the interest of consumers by disrupting market order and the price setting mechanism."
He said a provision in China's Price Law specifically forbids price fixing by way of fabricating news of a potential price rise.
Liu Junhai, a law professor with Renmin University, said a price increase by these companies could be seen as price-fixing if they command more than 50 percent of the market and they are done in collusion with each other.
Companies are free to set prices, but this must not be abused, he said, adding that announcing a price rise in advance does not legitimize it.
Zeng reportedly said the price increase was due to rising oil prices, the main raw material used in producing these household products.
In reports this month, unidentified sources said the four leading suppliers - Procter & Gamble, Unilever, Liby, and Nice Group - will raise product prices by 5 to 15 percent starting next month. The four companies command four-fifths of China's consumer product market share.
Zeng Xiwen, vice president of Unilever China operations, confirmed several companies would raise prices, but declined to name them.
According to industry analysts, spreading news of a price increase before they rise can lead to a sharp increase in sales. The news can also serve to test public reaction to a potential price rise.
Rush buying of personal care products has been reported in several cities since the news was released. Soap, shampoo and body lotion sold out in several supermarkets in Nanjing, capital city of Jiangsu Province.
Qiu Baochang, a lawyer with the China Consumers' Association, said: "Releasing news of a price rise before lifting prices undermines the interest of consumers by disrupting market order and the price setting mechanism."
He said a provision in China's Price Law specifically forbids price fixing by way of fabricating news of a potential price rise.
Liu Junhai, a law professor with Renmin University, said a price increase by these companies could be seen as price-fixing if they command more than 50 percent of the market and they are done in collusion with each other.
Companies are free to set prices, but this must not be abused, he said, adding that announcing a price rise in advance does not legitimize it.
Zeng reportedly said the price increase was due to rising oil prices, the main raw material used in producing these household products.
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