RICE NOODLE CARTEL BROKEN UP

The Development and Reform Commission of Guangxi Province of China broke up a cartel organized to increase the price of rice noodles, using in part it authority under the Anti-Monopoly Law (AML) and in part its pre-existing authority under the Price Law and the regulations under the Price Law. In China central bodies such as the National Development and Reform Commission (NDRC) one of the AML enforcement authorities, have counterparts in each province or other centrally administered areas.

It is reported that in November one producer started to organize meetings on prices and eventually some 18 producers signed a written agreement to raise prices on December 16, 2009. The price increase was implemented on January 1, 2010. Other producers also increased prices.

The local authorities investigated the price increase and levied administrative penalties. Three of the initial producers were fined 100,000 RMB (about $14,654.49 USD) and another 18 were fined from 30,000 to 80,000 RMB. The increases were rolled back and generally the price of rice noodles in the region has returned to normal levels.

¡°This appears to be the first report of the application of the provisions of Article 13 of the AML regarding monopoly agreements, and the first report of action by the NDRC,¡± commented Edward E. Lehman, Managing Director of Lehman, Lee & Xu. We will keep close watch on the progress of this event as well as on any other further actions in the enforcement of the AML in China.



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