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Cayman Islands company accused of unfair noodling

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A customer hesitates while wondering what kind of instant noodles to buy in a Chongqing supermarket on June 26, 2012

Tingyi (Cayman Islands) Holding Corp. has denied claims that it is using abnormal competitive strategies to push Uni-President Enterprises Corp. out of the instant noodles market in northeast China and Shanghai, cqnews.net reported on Tuesday.

Recently, it was reported that Uni-President had lost 200 million yuan due to Tingyi’s noodle selling strategies. However, in a phone interview with a reporter, Sun Zhi, Tingyi’s public relations manager of the company’s southwestern branch denied using “abnormal measures” to promote its products.

“If someone claimed that Tingyi has taken some abnormal measures to compete for market shares, please show the concrete evidence as well.” said Sun. He also said the charges are being further investigated.

Tingyi holds 60 percent of the instant noodles market on the Chinese mainland while only 15% belongs to Uni-President, though the latter created one special instant noodle, which boosted its overall sales 67 percent in 2010.

While the two have been fighting it out in northeast China and Shanghai, analysts say the next noodles battleground is expected to be Chongqing in the southwest.

Though the “fire” between the two large companies has yet to start in Chongqing, some minor competitive strategies are already in play. “The situation in Chongqing is different from that in Shanghai and northeast China. But it’s said that Uni-President is going to sign contracts with supermarkets under more general conditions than its competitor.” said a person who is in charge of the public relations department of one Chongqing supermarket.

Tingyi products take up ten times the shelf space of Uni-President in some large Chongqing grocery stores. Tingyi also promotes its instant noodles with strategies such as “three for one” sales, which means they cost about 0.5 yuan less than Uni-President noodles.

Judging from the fierce competition in northeast China and Shanghai, it seems that the market has saturated and become a “zero-sum” game, said one analyst. “Since Chinese people have become more particular about food, future development depends on creating new products with special tastes,” said Liang Mingxuan, a food industry specialist at CIConsulting. He also said that catering to the tastes of older people would be another good path for future company development.

For more on this story go to: http://english.cri.cn/6909/2012/06/26/3124s708621.htm

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