Competition Commission – Cantonese Webinar on "Resale Price Maintenance" (27 July 2023)

Speakers:

Mr Lester Lee, Acting Executive Director (Legal Services), Competition Commission

Mr Felix Au, Acting Head (Investigations III), Competition Commission

Background info about resale price maintenance (RPM)

RPM occurs when a supplier establishes a fixed or minimum resale price to be observed by its distributors, including retailers, when they resell a product. Suppliers may impose RPM by directly setting a fixed or minimum price for resale on which no reduction or discounts can be offered; or indirectly, such as by fixing the distributors’ margin or the maximum level of discount the distributor can grant from a set price level. To achieve RPM, suppliers may provide incentives to or apply pressure on distributors, using threats, intimidation, warnings, penalties, delays in or the outright suspension of the supply of products.

RPM in Hong Kong

Over the years, the Commission has received a number of enquiries and complaints relating to RPM – a common feature in any supply chain and which members of the public have clear concerns about. Among the complaints received, food and groceries, beauty and personal care, and household goods and electrical appliances are the top three sectors involved. In September last year, the Commission filed Hong Kong’s first RPM case in the Competition Tribunal against a supplier for imposing minimum resale prices for its monosodium glutamate powder product to be charged by its two main local distributors.