Unilever has been fined over public comments it made about possible price hikes that led to panic buying among Chinese consumers. But what exactly did the company do and how did their announcements affect the market?

In March, Unilever issued price increase notices to supermarkets in China, saying the company was planning to raise the prices of some of its products.

Later, Unilever spokesman, Zeng Xiwen, said the company was increasing prices because of a surge in raw material costs.

On March 22nd, Zeng said during an interview with China Business News, that "Competitors are waiting cautiously. What we can do is adjust the price a little, and see whether our rivals follow the move."

On the same day, he told Beijing News that "the industry of fast moving consumer goods is ready to enter a round of price increases. "

Over the following two days, Zeng once again brought up the issue. Several media witnessed him saying "if the cost of raw materials continues to climb, the company could further raise product prices in the future."

Then on March 24th, Zeng said "Some small enterprises couldn't hold up long ago. But they dare not to raise the price before the big companies make any moves."

These public comments led to panic buying.

The sales volume of daily products in Shanghai surged 20 times a week after the notice was issued. The sales of some of Unilever products increased almost 70 times.

Unilever is one of the biggest personal care players in China. Many of its products dominate the shelves of supermarkets in China. Any price change it makes could affect the market substantially.

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