China fines Unilever after customers clean it out

Just talking about the problem of inflation has got Unilever into hot water in China, where the authorities fined it 2 million yuan (£177,000) yesterday for saying in March that it planned to raise the cost of its personal care products.

After Unilever warned two months ago that it might have to increase the cost of soaps and detergents in China, it saw a run on its products, with sales at 100 times their usual volumes. That provoked an angry reaction from the government, which is desperate to keep a lid on inflation. China's National Development and Reform Commission accused Unilever of having "disrupted market prices". "Severe punishment was meted out this time to break ugly habits and build new rules," it added.

Unilever, which has already withdrawn the price increases, said it had accepted the fine.

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