The national price regulator yesterday lashed out at a food association for colluding with its member companies to manipulate prices.
The China branch of the International Ramen Manufactures Association (IRMA), which is also referred to as the China branch of the Instant Noodle Association by the media, had since last year organized three meetings to discuss price rises, according to a statement on the website of the National Development and Reform Commission (NDRC).
The timetable and scope of the price rises were worked out during the three meetings, the statement said.
And the noodle companies involved have successively raised their prices since June this year in accordance with the consensus reached during those meetings.
The statement said the association had plotted many times to raise prices collectively and intentionally revealed news of price rises to the media, which led to a noodle-buying spree in some places.
"These activities have severely disrupted the market price order, hindered the fair competition of businessmen and damaged the legal rights of consumers," it said.
The NDRC said the association had violated the price law and ordered it to redress its mistakes and make public explanation to disperse the negative impact of its actions.
And more harsh punishments are likely as the investigation unfolds, it added.
The statement quoted an anonymous NDRC official as saying that the price of instant noodles should be adjusted by the market.
He said that it was understandable that noodle companies would float their prices a little given the rising costs of ingredients this year, but trade associations are strictly banned from colluding to manipulate prices.
The official also told other trade associations to learn a lesson and warned them to against plotting collective price rises.
The harshly worded criticism came at a time when food prices are soaring nationwide, which drove the country's inflation rate to a 10-year high last month.
It also follows an announcement by the NDRC that it would wage a campaign targeting businessmen who collude on price rises.
The State Council has also rolled out a series of measures urging local governments to stabilize food prices with a steady market supply.
The IRMA declined to comment yesterday, but Meng Suhe, an official from the association denied any direct connection between the meeting and price rises in an interview with the China News Service last month.
(China Daily August 17, 2007)