Competition law needed in HK, says professor

PUBLISHED : Thursday, 15 March, 2007, 12:00am
UPDATED : Thursday, 15 March, 2007, 12:00am


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A Chinese University academic has called for the introduction of a cross-sector competition law after a survey found Hong Kong retailers, especially supermarkets, abused their market power with suppliers.

The survey of 121 suppliers by the university's marketing department found many retailers dictated prices and demanded exclusivity.

It found 62 per cent of respondents had been forced to share retailers' promotion fees and 63.6 per cent had to bear responsibility for damaged goods.

More than 61 per cent of respondents had to accept the retailers' absolute authority to remove goods they had supplied, while 46.3 per cent had been forced to offer incentive rebates.

'The survey clearly shows that suppliers and retailers in Hong Kong's retailing industry do not operate on an equal footing,' said Sin Yat-ming of Chinese University's department of marketing.

'It's an unfair power dynamic where retailers are making too many demands on suppliers.'

The survey, conducted in December, asked about the suppliers' experiences in the past seven years. It did not look into the experience of retailers.

The survey found that between 30 and 40 per cent of respondents had experienced restrictions by a major retailer regarding doing business with other retailers. Some 32 per cent had to accept the retailer as their exclusive retailer and over 36 per cent had to accept a stipulated price charged to other retailers.

Supermarkets were found responsible for an overwhelming majority of the unfair practices by retailers. About 70 per cent of the disadvantaged suppliers were found to have a supermarket as their major retailer.

Professor Sin said a cross-sector competition law was needed to ensure fair play between suppliers and retailers.

He said the government should consider setting up a regulatory body to handle complaints about anti-competition behaviour.