Bottles of Unilever Plc's Lux brand shampoo are arranged on a shelf in a supermarket in downtown Beijing. The Chinese media reported that some manufacturers, including Unilever and Procter & Gamble, are planning to increase prices of cleaning and personal care products by an average of 10 percent, beginning in April. [Photo / Bloomberg News]

Industry body says increase will not prove a burden to daily life

BEIJING - The National Development and Reform Commission (NDRC) will send inspectors to Chinese consumer goods manufacturers to investigate the reason for a fresh round of price increases for their products.

Chinese media reported that most manufacturers of daily consumer goods, including Unilever Plc and Procter & Gamble Co (P&G), are planning to increase the prices of cleaning and personal care products by an average of 10 percent from April.

Questions are being raised among general public about whether some industry giants are colluding to set prices in the market.

Zeng Xiwen, vice-president of Unilever China, denied that business collusion exists among the manufacturing companies. He said the price rises have mainly been caused by significant increases in raw material costs.

Calls to Zhang Qunxiang, spokesman of P&G, were not answered on Wednesday.

The China Cleaning Industry Association (CCIA) said that raw materials prices for cleaning products increased by 40 percent in the second-half of 2010. Rising labor costs have also added to the manufacturers' woes.

The CCIA said the price hike will help the companies to avoid getting into financial difficulties in the future. The adjustment in prices will not impose a heavy burden on people's daily lives because the consumption rates of those cleaning products are small.

CCIA also mentioned in the statement that the price increase is not enough to offset the rising raw material costs.

However, NDRC said the price hike affecting daily consumer goods would affect lives, so manufacturers should consider carefully before charging higher prices.

Some manufacturing company managers will be invited to have talks with NDRC.

The central government has attempted to stabilize consumer goods prices during recent months, but many says that it is proving difficult to see the results.

Related readings:  China Feb CPI up 4.9%  Heightened inflation a concern in China  China expects inflation to ease later this year  PBOC further tightens liquidity to control inflation expectation

The Consumer Price Index (CPI), a key gauge of inflation in China, is predicted to rise as high as 5.2 percent in March, compared with 4.9 percent in February.

Some analysts said the price rises for cleaning and personal-care products will make the situation worse.

Some Chinese householders rushed to supermarkets to buy personal consumer-care products such as shampoo and toilet paper in advance to avoid any possible price increase.

"The shelf life of those groceries is quite long. To some extent, it can reduce my daily expenses at a time when the price of everything seems to be increasing," said Li Jichun from Shanghai.

Tingyi Holding Corp, one of the largest manufacturers of instant noodles with its Master Kong brand, was also reported to be planning to increase the price of bowl noodle from April 1.

However, Liu Qianzong, vice-president of the company, told China National Radio on Wednesday that the plan may be delayed.