Unilever says it has jeopardized profit margins despite price hikes

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TBS Report

September 27, 2022, 10:20 p.m.

Last modification: September 28, 2022, 5:56 PM

Unilever logo. Image: Collected

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Unilever logo. Image: Collected

Unilever Bangladesh has jeopardized profit margins despite rising prices for soap, shampoo and other products due to soaring raw material costs in the global market and transport costs and a strong dollar, a said his lawyer on Tuesday.

Attorney Mustafizur Rahman Khan, a lawyer for the multinational, made the claim during a hearing organized by the Bangladesh Competition Commission.

The commission filed a complaint against Unilever Bangladesh for allegedly overselling products by creating instability in the soap, shampoo, toothpaste and washing powder market.

On Tuesday, the commission recorded the hearing of a total of nine individuals and organisations, including Bangladesh Edible Oil Limited, City Group and Rashid Agro Food Products Limited, on the issue of rice market destabilization.

During the hearing, Mustafizur Rahman Khan said that soaring commodity prices in the global market, rising transportation costs caused by rising oil prices and the appreciation of the dollar have driven up the prices of raw materials in various ways. Yet Unilever has priced products by compromising its profits.

He asked the commission for eight weeks to prepare data on the volume of production, import and supply of various products in the market from July to September 2022 requested by the commission.

The attorney said Unilever manufactures and markets more than 100 products. For this, it takes time to prepare data on various issues, including raw materials for each product.

Responding to its time-related request, the commission set October 16 for the next hearing and asked the company to provide the necessary business data that day.

Earlier, a commission official read the charges against Unilever. President Md Mofizul Islam and three members of the commission were present at the hearing.

Among the charges, Unilever abnormally raised the prices of soap and washing powder under various pretexts, such as the Russian-Ukrainian war.

The multinational has exerted influence in the commodity market through anti-competitive activities, such as the abnormal increase in the prices of soap, perfumed soap, toothpaste, shampoo and hand soap and the control of their supply in the market for the three months to September, the charges added. .

During the period, the company increased the prices of Tk5 Mini Soap, Tk5 Wheel Laundry Soap, Tk20-25 Large Lux Soap, Tk5 Vim Bar, Tk50 Wheel Powder -55 and the Surf Excel of Tk70-75.

During the hearing, the lawyer for Bangladesh Edible Oil Limited stated that the company does not have its own rice mill. It sources its rice from various mills and markets it under two brands: Rupchanda and Viola. Rupchanda brand rice price is slightly higher while Viola price is comparatively lower.

He said Rupchanda brand rice is marketed for elites and Viola for ordinary people. He also asked for time to provide the necessary information requested by the committee.

Similarly, various companies, including Citi Group and Rashid Agro Food Products, have also said they need more time to provide information.

The Bangladesh Competition Commission has filed 44 lawsuits against 36 companies and individual firms, including giants like Unilever, Pran, Square, ACI, Akij, Bashundhara and S Alam Group, for destabilizing the commodity market by raising prices in an unusual way.

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