Chinese Law Prof Blog

Editor: Donald C. Clarke
George Washington University Law School

Sunday, July 22, 2007

What part of "colluding to fix prices" don't you understand?

My friend Lester Ross sent me the following tidbit (appended at the end of this post) about the Chinese dairy companies getting together to agree not to engage in certain kinds of competitive activities. According to the report, the five big dairy companies have agreed to exercise "self-discipline" in the Beijing retail market. Fierce competition is driving down profits, and the price of milk is apparently the same as it was in 2005. Moreover, once the dairy companies succeed in driving up retail sale prices, they plan to turn their attention to procurement end of things, and to "standardize" their purchasing activities.

Although China does not yet have an antimonopoly law, this would seem to be a pretty clear violation of the Price Law, which states in Art. 14: 经营者不得有下列不正当价格行为: (一)相互串通,操纵市场价格,损害其他经营者或者消费者的合法权益 ("Operators may not engage in the following acts of improper pricing: (1) colluding with each other to manipulate market prices, harming the lawful rights and interests of other operators or consumers"). Yet the above report was not the result of a muckraking expose; it was the result of an official, public announcement made by the Dairy Industry Association.

This shows in an interesting way, I think, the absence of what might be called a certain culture of the market. I doubt if the Dairy Industry Association had any intention of breaking the law, or even of doing anything legal but improper. It just seemed to them that when profits are going down because of disorderly markets, collective action to maintain profit levels is entirely appropriate. And journalists and the public have not yet learned to be cynical about assertions of the virtues of "orderly" markets.



  本报讯(记者 胡红伟)牛奶买几送1的捆绑销售行为,下周一起将从京城乳品市场逐渐消失!昨日,北京市奶业协会召集伊利、蒙牛、三元、三鹿、光明5大行业巨头,表示在全国率先执行终端销售自律行为。


  北京市奶业协会理事长范学珊介绍,销售自律首先就是“取消所有涉及乳与乳制品产品的捆绑、搭赠(包括其他产品或礼品)销售行为。”范表示,最常见的250克利乐包装奶,保底成本价1.7元,不算一些税收和物流等成本,现在市场上一般销售价格为1.9元,但如果买5送1,该产品就不会赢利,如果买3送1,甚至买2送1,那属于严重亏损。记者昨天在崇文门新世界超市发现,大多数品牌正在“清仓”,捆绑促销行为比平时更多,一款三元早餐奶买 3送1,折算下来价格仅为1.2元。第二为禁止低于成本价的倾销行为,取消特价、降价销售。对于特殊的临逾期(已超过二分之一保质期)产品,其销售价也不得低于成本价。另外,鼓励优质优价。






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Great post. It will be very interesting to see what happens.

Posted by: China Law Blog | Jul 22, 2007 3:34:40 PM

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