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China Daily Website

Chinese liquor giants fined for price fixing

Updated: 2013-02-23 14:43
( Xinhua)

BEIJING -- Chinese top two liquor makers Kweichew Moutai and Wu Liangye were fined a total of 449 million yuan ($71.41 million) for price fixing, according to local price regulators.

The Guizhou-based Moutai and Sichuan-based Wu Liangye were ordered to pay 247 and 202 million yuan in fines, respectively, according to statements from local price regulators on Friday.

It marked the harshest fines since the implementation of China's antimonopoly laws in 2008.

The statements said that the companies had restricted the lowest prices on its liquor products for resale at their distributors, with whom they had made vertical monopoly agreements.

The punishments have shown that the government makes no exception for any company when handling antitrust cases, as the two fined businesses are both state-owned, said Wang Xiaoye, a professor at Graduate School of Chinese Academy of Social Sciences.

But the fines were relatively light, Wang said, citing that they only accounted for 1 percent of the total revenue the two companies recorded last year. The figure can reach as high as 10 percent according to Chinese antimonopoly laws.

The punishment added to the plight of the two liquor giants, as a recent government frugality campaign is expected to have a sizeable impact on sales of their products, which mainly target high-end consumers.

The penalties follow similar fines to Samsung, LG and four Taiwanese LED makers in January.

 
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