Huge fines imposed on Maotai (茅台) and Wuliangye (五粮液)

Maotai (茅台) and Wuliangye (五粮液) are two very famous premium liquor producers in China. Both were found by the PRC anti-monopoly authorities to have administered resale price maintenance in violation of the PRC Anti-monopoly Law, in that both engaged in resale price fixing for their distributors, penalising those who failed to observe the minimum price cap. On 22 February 2013, the authorities imposed huge fines of RMB247 million and RMB202 million on Maotai and Wuliangye respectively, for their anti-competitive conduct in administering resale price maintenance.

These two cases are strong indications of the PRC authorities' determination to implement the Anti-monopoly Law to protect the interests of consumers. Enterprises would thus be well advised to review their business conduct and pricing arrangements with their distributors to ensure that they do not constitute resale price maintenance punishable under the law.