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Survey: HK retailing industry sees unfair practices
2007-03-13 11:38:15 Xinhua English

HONG KONG, March 14 (Xinhua) -- Unfair practices generally exist in Hong Kong's retailing industry, said a study result made public Wednesday by the Chinese University of Hong Kong.

The university's Marketing Department conducted a survey with 121 local retail suppliers last December which focused on the interplay between suppliers and retailers.

Products of the responding suppliers include food/beverages, cosmetics/personal care, pharmaceutical/health, food, household products, rice/oils, dried sea foods, etc. Their major retailers are supermarkets, drug stores/personal care retailers, beauty/ cosmetics retailers, etc.

Suppliers were asked questions about the operational practices such as price setting, incentive rebate, responsibility of damaged goods, share of promotion fee, etc, basing on their experience in the past seven years.

The results reveal that some possible unfair practices and behavior including stipulating prices charged by suppliers/ retailers, restricting suppliers to supply goods/sales services to other retailers, requiring exclusivity from suppliers and restricting retailers to sell other suppliers' goods, etc. did exist in the retailing industry in varying degrees.

However, since there is neither a sector specific nor a cross-sector competition law in Hong Kong to define what constitute anticompetitive business practices, it is hard to conclude that the behavior of retailers/suppliers were anticompetitive.

Besides, when industry players are in face of any situation that they consider as unfair, there are no laid down procedures for further investigation and complaints.

The researchers said that results from this survey will be a valuable reference for the city's government who is actively studying if Hong Kong needs a cross-sector competition law.

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