Toilet Paper Crisis in Taiwan Sparks Government Intervention

(Bloomberg) -- Taiwan’s premier is urging the public to avoid hoarding toilet paper after a reported spike in prices by manufacturers spurred a run on supermarket supplies.

The island’s government is monitoring distributors and retailers for signs of price manipulation after local media said major toilet-paper brands would boost prices by as as much as 30 percent from next month, spurring anxious shoppers to stock up on the product and strip store shelves over the weekend.

More than half of the varieties of toilet paper listed on Yahoo’s Taiwan shopping website were out of stock on Tuesday. The Fair Trade Commission says it will investigate whether the major brands have been colluding over prices, warning that the offense is punishable by fines of as much as NT$100 million ($3.4 million).

While ordinary Taiwanese may be in panic mode, the crisis initially proved good news for related companies. A gauge of paper stocks surged by a record on the Taiwan exchange on Monday, with YFY Inc., Taiwan’s biggest toilet paper maker by market value, jumping 7 percent before pulling back today.

U.S. pulp prices have risen more than 35 percent in the past year, contributing to the hike in toilet-paper costs. But the outlook may turn for Taiwan.

While paper prices are expected to continue trending higher in the long term, the government’s actions and competition in the Taiwanese market may mean the reported price hikes don’t actually come to pass on the island, said Taishin Securities Investment Advisory Co. Vice President Huang Wen-ching, who tracks local paper stocks.

To contact the reporter on this story: Yu-Huay Sun in Taipei at ysun7@bloomberg.net.

To contact the editors responsible for this story: Richard Frost at rfrost4@bloomberg.net, Samson Ellis, Emma O'Brien

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