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Unilever fined for talking price rise

business Updated: May 06, 2011 21:13 IST

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China said on Friday that it has fined consumer products giant Unilever $310,000 for talking to Chinese media about planned price hikes that sparked panic-buying of shampoo and detergents in late March.

The National Development and Reform Commission (NDRC) imposed a two million yuan fine after finding the Anglo-Dutch company "illegally disseminated news of price hikes and disturbed market order", the top economic planning agency said.

Unilever said later it would "temporarily postpone" price increases planned for April 1 at the request of the NDRC.

The company issued a statement on Friday saying it was committed to China and would "respect" the decision by Chinese authorities.

The remarks by Unilever in March had "strengthened consumer expectations for price increases", the NDRC said in a statement, while the government was trying to rein in soaring food and housing costs.

Beijing — mindful of growing public anxiety over rising prices — has used a range of measures to curb inflation, which remained stubbornly high at 5.4% in March — the highest annual rate since July 2008.

The central bank has hiked interest rates four-times since October and increased the amount of money banks must keep in reserve, effectively cutting their lending power, but with little effect so far.