Huiyuan Has No Pressure for Price Rise

The rising cost of raw materials has led to price hikes of some Chinese products, according to reports from foreign media. However, Huiyuan Group, the leading beverage producer in China, said that it did not have much pressure for price rise in the rest of 2011, as it had already lifted its prices by an average of 8% at the beginning of the year, and its pressure was more from the increasing labor cost.

In the coming two years Guozhi Guole will be coming out of about ten factories, said Zhu Xinli, founder and president of Huiyuan Group, in an interview on Tuesday with Reuters. It is an all-new product that blends juice with soda and, as Huiyuan expects, can contribute to around 20% of its sales revenue by the end of next year. In the second half of last year, one factory already started to produce Guozhi Guole and the production capacity is estimated to be around 2 billion bottles if the other nine factories join the production.

Chinese government is making great efforts in checking inflation, thus containing the cost rise of raw materials. I think we are unlikely to see price increase in raw materials but we will experience increasing labor costs, said Zhu Xinli.