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George Washington University Law School

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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.

买几送1将淡出北京乳品市场
2007年07月20日
新京报

  行业整体压力加剧;北京率先执行行业自律

  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。

  价格战将被限制

  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。

  据悉,奶业协会检测小组将从5家核心企业各抽调一名监督员,长期监督,另外奶业协会还对普通消费者开通了一条监督电话,并与各大商超进行了沟通。

  乳业重负威胁奶源地建设

  范介绍说,执行行业自律是迫于当前整个乳品养殖和加工行业不断增加的压力。

  据范介绍,原料奶收购和终端产品销售两个环节价格低,秩序混乱。尤其液态奶同质化严重,供大于求,高端产品少,在激烈价格战下,行业整体利润率降低。“终端的混乱直接威胁全行业的效益。”他表示,“尤其今年养殖成本迅速增加,畜禽产品都涨价,惟独牛奶不涨,与2005年的价格持平,实在不正常。”他说,终端销售环节再打压,中小企业必定无法承受,最后就会伤害奶业的根本———奶农,杀牛卖肉等现象,已威胁奶源地建设和奶业发展后劲,北京地区的奶源问题也很严重。

  范表示,在终端销售出手后,接下来将对原料奶收购进行规范。

http://lawprofessors.typepad.com/china_law_prof_blog/2007/07/what-part-of-co.html

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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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