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P & G Price Rises And Inflation, The New Trend by betty
Recently, the global cosmetic giant Procter & Gamble announced a comprehensive price increases of its products in September, although the price increase program only for the North American market, but among consumers in China, has caused a great uproar. Because P & G price rises, there is a strong symbolic meaning, the past year, led the main force of China’s CPI continued high food, now the main price increases not only from food to non-food, but also towards the cost of most of the day digestion of the industry. This signal can not but the future direction of prices to generate new concerns.
Year, China’s CPI continued higher, became the lives of the people and government of the biggest challenges. Throughout the CPI over the past year traveled path, there is a significant feature, that is, high CPI, mainly by food prices, driven by the rapid rise. In just the past few months, for example, in April CPI rose 8.5%. Which food prices rose 22.1%, non-food prices rose only 1.8%; May CPI rose 7.7%, food prices rose 19.9%, non-food prices rose only 1.7%. Can see, food is the driving force for CPI increases, non-food products rose almost no effect on the CPI. The cosmetic industry, their medical care and personal articles commodity prices, in the past year, not only small gains, even many months in the month rose 1%, are very resistant up the plate.
In this context, P & G to price increases, the shock caused by self-evident to people. Because the cost of daily chemical industry, strong digestion, and as the industry leader, Procter & Gamble, Unilever and other companies, but also have a strong cost of digestion. This super capacity from two aspects, one is as a global brand, P & G’s products there is no doubt the brand premium, that is, it had profit margins will be higher than peers. On the other hand, as a highly market-oriented industry, the industry leader must have good precision management capability to link from a cost management than the profit. Now, all word within P & G, and naturally people Dunqi worry.
Then, P & G’s word within reason what is it? To put it bluntly, is that one: oil. Because oil is not only cosmetic industry, fuel industry is the main raw material. In the past year, international oil prices more than doubled this increase, P & G even if we have another great ability, but also difficult to self-digestion. Of course, prices are clearly only in North America, but that does not mean that China will not be affected. China, although not with the international market price fluctuations, but the combined CPI high costs, daily chemical industry had already been hard to breathe. According to statistical information on the open market, domestic listed companies in eight days of sales since 2006, gross margins continued to decline, the year before, the first quarter of last year and this year the average sales gross profit was 24.61%, 24.03%, 21.58 %, some brands have started a small price increase or reduction in packaging.
The most worrying is that China’s oil prices can not stay aloof. As oil and other energy prices in China to implement specific control policies, international oil price changes have not passed PPI (producer price index) transmitted to the CPI on. One obvious fact is that before May this year, China’s PPI has been below CPI. At the same time, most of the implementation of energy and raw materials prices market-oriented countries, PPI rose more than the CPI. However, this situation under government protection ultimately unsustainable. This year in May, China’s PPI for the first time more than CPI, into June, oil prices once again, the price a record high. These facts show that prices of food source has shifted from energy, raw materials and industrial products.
Visible, Procter & Gamble company price increases is not terrible, but hidden behind P & G PPI prices high and rising non-food prices accelerated, it is well worth our attention. Once the food prices and non-food prices rose simultaneously up or relay in a situation, price regulation becomes more difficult.
I am an expert from China Manufacturers, usually analyzes all kind of industries situation, such as tiffany heart toggle necklace , silver starfish.
Article Source: http://www.earticlesonline.com/Article/P—G-Price-Rises-And-Inflation–The-New-Trend/837072
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