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Leading supermarket chains deny price fixing
By Li Likui
Published: Apr 12 2012 12:18
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Two of the city’s largest supermarket chains, Wellcome and PARKnSHOP, have been accused by the Hong Kong Federation of Trade Unions of colluding on price fixing.

A survey, published on Wednesday, revealed that the prices of eight targeted commodities on sale at the two chains were almost identical over consecutive periods.

The survey had also found the price of the targeted goods in so-called Friday “sales” at both supermarket chains actually are priced higher than on the previous day, Thursday.

The Hong Kong Federation of Trade Unions conducted its survey from February to March, observing the prices of eight popular goods at both supermarket chains in five different areas, including Sham Shui Po, Tsuen Wan and Sai Wan.

“This is misleading on purpose. The supermarkets have taken advantage of the shopping habits of people who usually don’t shop on workdays and may not have a clear memory about prices during workdays,” said Wong Kowk-hing, a lawmaker and member of the union.

The survey showed that both supermarkets had changed their prices at the same time, to almost the same level. Seven of the eight targeted commodities, including toilet paper, rice and soy sauce, were priced the same, while both claimed their prices were the lowest.

The unions urged the government to implement the anti-trust law as soon as possible as a way to ensure consumer rights.

A marketing expert argued however, that collusion on pricing is difficult to prove.

“Based on what the survey showed, it is very hard to say for sure that the two chains are engaged in a conspiracy to fix prices,” said Leo Sin Yat-ming, a professor at the Marketing Department of the Business School in the Chinese University of Hong Kong.

Sin said the two chains have 70 to 80 percent market share in the city, making it very easy for them to control the market price of daily commodities. “It is possible that because they are rivals, it is very common practice for them to monitor each other’s pricing strategies and follow each other.”

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