200 consumer-goods manufacturers face six-month freeze on retail prices

The measure is aimed at capping inflation of 6-7 per cent and help relieve the rising burden on consumers, in accordance with six government measures aimed at reducing the cost of living.

In return for cooperation in freezing retail prices, the ministry will help cut firms' production costs by lowering import tariffs on raw materials and providing tax incentives for manufacturers.

Yangyong Phuangrach, director-general of the Internal Trade Department, said the plan would not affect other manufacturers.

"The ministry will ask for cooperation from private enterprises, but we are aware that they have been facing rising costs so the ministry will try to arrange tax privileges for them in order to help them cut costs and not have to raise consumer prices," Yangyong said.

Special measures to help manufacturers include cutting import tariffs on raw materials and finding ways to reduce energy and water charges.

In return, they will be encouraged to produce cheaper goods to help people on low incomes.

Next week, the ministry will hold meetings with manufacturers from all industrial sectors, including household products, canned fish, cooking oil, fresh food, processed food, animal feed, pesticides, car batteries, fertiliser, cement and medicines.

The ministry has warned manufacturers who have increased retail prices that it will control profit margins if it finds companies have raised prices only to improve their profit margins.

Yangyong said the ministry was studying the pricing structure of consumer goods and may consider applying controls and imposing price ceilings, if necessary.

He said it would only allow prices of some products to be increased if it found the market had at least 10 enterprises in competition and there was no evidence of market dominance.

Meanwhile, the ministry has insisted it will not allow producers of palm oil and soybean oil to raise retail prices, as consumers are already suffering from high prices.

Deputy Commerce Minister Wiroon Techapaiboon yesterday said the ministry would only consider allowing price changes for these goods once production costs had gone down.