The Thai unit of a multinational consumer product firm has threatened to sue the Internal Trade Department for blocking retail prices rises despite high oil prices. The policy had caused the group big losses, a department official said.

"The Thai unit said its parent company had seriously complained about its operations in Thailand, which have incurred losses due to this practice," said Siripol Yodmuangcharoen, director-general of the department.

Siripol refused to name the company. Several multinational consumer goods manufacturers operate local units in Thailand, including US-based Procter & Gamble and Colgate-Palmolive and Anglo-Dutch Unilever.

The department chief said the company threatened to file a lawsuit against the policy with the Justice Ministry, the Foreign Affairs Ministry and the Civil Court.

The Commerce Ministry has refused all requests by manufacturers recently to increase the retail price of goods, in a bid to curb inflation. Only firms that can prove production costs have been hit hard by escalating oil prices have been allowed to increase the price of their goods.

Siripol said the department would look into the company's operations here. It claims to have lost a significant sum from the price controls.

"We tried to explain that we only allow price increases if their production costs have really been affected. We have no policy to manage unfair practices because local companies also work under the same regulations without any approval for price rises," he said.

Many companies have complained about rising costs since oil prices started jumped last year from about US$40 (Bt1,521) per barrel to over $60. Those whose products are subject to Commerce Ministry price controls have tried in vain to get price rises approved.

Currently, the department has about 370 products on its price-control list. It also has 150 products on a watch-list, and the ministry keeps close scrutiny on the prices of such items.

Consumer goods manufacturers have so far sought to raise the prices of 22 items. However, the department has only allowed soft drink firms to increase prices in April. Decisions on other items are still pending.

Goods awaited approval for price increases include detergents, shampoos, fish sauce, cement, and electrical wire.

If the above case is filed, it could pave the way for other companies to follow suit, as several firm have complained about rising operating and transport costs.

Petchanet Pratruangkrai

The Nation