Unilever claims it compromised on profit margins despite price hikes

Unilever Bangladesh has compromised with its profit margins despite increasing prices of soap, shampoo and other products owing to soaring costs of raw materials in the global market and freight charges and a strong dollar, its lawyer claimed on Tuesday.

Barrister Mustafizur Rahman Khan, counsel for the multinational company, made the claim at a hearing arranged by the Bangladesh Competition Commission.

The commission has filed a case against Unilever Bangladesh for allegedly selling products at excessive prices by creating instability in the soap, shampoo, toothpaste and detergent powder market.

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

At the hearing, Mustafizur Rahman Khan said soaring raw material prices in the global market, rising freight charges caused by increasing oil prices and dollar appreciation have driven up commodity prices in various ways. Yet Unilever has been pricing products by compromising on its profits.

He requested an eight-week period from the commission to prepare data on the amount of production, import and supply of various products to the market from July-September 2022 sought by the commission.

The lawyer 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 petition, the commission fixed 16 October for the next hearing and asked the company to come up with the necessary business data on that day.

Earlier, an official of the commission read out the charges brought against Unilever. Chairman Md Mofizul Islam and three members of the commission were present at the hearing.

Among the charges, Unilever has abnormally increased the prices of soap and detergent powder on various pretexts, such as the Russia-Ukraine war.

The multinational company has exerted influence on the commodity market through anti-competitive activities, such as abnormally increasing the prices of soap, perfumed soap, toothpaste, shampoo and handwash and controlling their supply to the market for the three months through September, the charges added.

During the period, the company increased the prices of mini soap by Tk5, Wheel Laundry Soap by Tk5, large-sized Lux soap by Tk20-25, Vim bar by Tk5, wheel powder by Tk50-55 and Surf Excel by Tk70-75.

At the hearing, the lawyer for Bangladesh Edible Oil Limited said the company has no rice mill of its own. It procures rice from different mills and markets it under two brands – Rupchanda and Viola. The price of the Rupchanda brand rice is slightly higher while the price of Viola is comparatively lower.

He said the Rupchanda brand rice is marketed for elite people and Viola for common people. He also requested time to provide the necessary information sought by the commission.

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

The Bangladesh Competition Commission has filed 44 cases against 36 firms and individual businesses, including corporate giants like Unilever, Pran, Square, ACI, Akij, Bashundhara and S Alam Group, for destabilising the commodity market by hiking prices unusually.