Sunday, June 5, 2011

Unilever prices did nothing wrong, belongs to the market behavior

On May 24, in announcing the suspension of the price for more than a month after Unilever directly inform the various channels, increased HAZELINE and Guinness two brand owned by Unilever product prices, highest increase reached 10%. Appreciation of Unilever finally successful.
For Unilever's low price, national development and Reform Commission price supervision and Inspection Department Deputy Inspector Li Qing said that Unilever will not be punished because of it.
In late March this year, Unilever announced its intention to the price of subsequent national development and Reform Commission April 1 interviews of major Japanese giants, after which Unilever Announces moratorium on prices, also was fined $ 2 million by national development and Reform Commission.
This is also in China in recent years one of the biggest such penalty, warning meaning is clear, but Unilever "respect for national development and Reform Commission fines" stand, but some local media for its "renfa pleaded not guilty," an evaluation of the Unilever what crime? For Unilever's low prices, network with media survey, total 46% of respondents believe that development and Reform Commission should not just daily chemical industry (20%) or price for criticism (26%), resisting attitudes towards the rising price of Unilever only to 17%.
However, to be honest, Unilever prices did nothing wrong, belonging to the market.
First, from the industrial chain and two areas of transport, our products are generally high molecular organic compounds and its dependencies for petrochemical products in the production of a very strong, which caused the price of its production costs, impact of increases in oil prices and volatility are clear.
A background is that China's oil price from 2005 to now almost always continued the upward trend, while PetroChina (10.86,0.00,0.00%) and Sinopec's absolute dominance also allowed national development and Reform Commission, the State-owned assets supervision and cannot be effectively controlled.
Diesel and gasoline prices rise directly push up the cost of logistics, and Unilever's major products of low value commodity characteristics, makes the effect for the total cost of logistics cost is also very obvious, too much toll station, you rely on high levels of Highway logistics total cost of daily chemical products.
In other words, if the rising price of Unilever does not, in the context of current monetary hyper-, various factors will erode the profitability of the company, which makes its resistance to reduce market uncertainty, further affecting the order in the market as a whole.
Second, depends by the mainstream media inadvertently created by public opinion, regardless of price information for Unilever announced in advance, and is the cause of development and Reform Commission for the information the ticket, price media attention makes Unilever a specimen, and "renfa pleaded not guilty," describes the rising price of Unilever qualitative directly.
Is to be noted that this qualitative Unilever may bring two negative effects, it is a direct antithesis of bring it to the consumer on the one hand, on the other hand the Unilever at the moral dilemmas of a confrontation with the Government Decree, and the impact of the former, once expanded, is destructive.
Lucky is, relative to inadvertently manufacture is the inverse of the media, Unilever's prices still won the acquiescence of the majority of consumers and understand. Thus, I believe that, whether it is for the rise in raw material costs, logistics costs, or for improving the status of public opinion in the disadvantage, Unilever is supposed to rise. As for how much the rising, Unilever, should have at least a rough data support.