An increasing chorus of bloggers (including ourselves) have written extensively about the recent anti-competitive price-fixing moves by Chinese fast food chains, instant noodle manufacturers, milk producers and state-owned airlines. Now, even China Daily columnist Raymond Zhou has contributed his own tune to the cacaphony of voices in an article Thou shalt not collude on pricing. From the article:
Thou shalt not collude on pricing, the regulatory god said unto the Moses of industries in most countries, including China. But the instant noodle cabal either did not hear it or turned a deaf ear. In late July, noodle makers joined forces in raising prices by about 20 percent, and as much as 40 percent for some products.After less than three weeks of regulatory pressure, media assailing and public discontent, the industry backed down, apologized and initiated an across-the-board price cut. Is this a triumph of consumer rights and regulatory protection? Yes … hmm maybe.
Instant noodle is more than the Chinese equivalent of the Western television dinner. The busy or lazy depend on it; the nation’s gigantic floating population is buoyed by it; millions of train passengers slurp so many noodle cups that, if not muffled by the roaring locomotive, the collective giant sucking sound might be interpreted by space aliens as the whistle of earthlings. [Read more…]
Later in the article, Zhou asks why the instant noodle makers didn’t know that their act would violate business regulations. According to him, “Anyone with a modicum of MBA knowledge would know” that it was not right to “raise prices in accord”. He then attempts to answer his own question:
One reason could be there had been no such case before – not that there was no price-fixing before, but no prosecution of such cases.
Throughout the entire article, Zhou fails to mention anything about the recent moves by the state-owned airlines to offer “express” air services between Beijing and Shanghai that have led to a rise in prices across the board, but he does question:
While it is certainly commendable that government agencies are pursuing violators of antitrust laws, we must go one step further and ask: What if it is an industry with which the government is financially entangled, such as the real estate business?
In the way that he alludes to the problem without really mentioning it point blank, it is almost as though Zhou, as a China Daily columnist, would be stepping across some undefined and invisible out-of-bound markers if he were to point his fingers at the airlines for price-fixing — a move which has been given nothing but positive spin by the state-owned media.
Previously on Shanghaiist
Why have air ticket prices gone up?
Instant noodle manufacturers association slapped down by reform commission for price fixing
On other blogs
Shanghai Scrap: Price-fixing, Chinese Style
China Herald: Raising the prices
China Law Blog: Hey China Milk Man, What Part Of Price Fixing Do You Not Understand?
China Law Blog: China Noodles And Airlines: How Shall I Price Thee?
Photo of Tibetan man tucking into a bowl of instant noodles from pppboy.