National Regulation Abandon Price Fraud

2019-06-11 10:12 WBO Global

The wine industry has always had price confusion. Some liquor stores label prices freely. Unreasonable high code prices are very common.

 

However, the State Administration for Market Regulation has announced a draft for comments of the new regulations prohibiting price fraud, some of which directly refer to the above chaos.

The Draft for Comments of the New Regulations Prohibiting Price Fraud is Promulgated

On May 31, the State Administration for Market Regulation issued a notice on the public advice for the "Clear Price Tag and Prohibition of Price Fraud (draft for comments)". The draft for comments will be announced to the public and opinions will be collected.

 

 

The new regulation is introduced because market regulation department believes that the most commonly used and most basic "Provisions on the Price and Services" and the "Prohibition of Price Fraud" can no longer meet the daily regulatory needs, which new legislation is needed.

 

In the new legislation, in addition to improving the practicality of the code price system, it is more important to solve the problem of the price fraud. One of them is considered to be crucial: if the operator claims a price discount, the same operator shall be in the same business premises, and the lowest transaction price should be based on the price within 7 days before the promotion. If there is no transaction within the previous 7 days, the discount shall be based on the last transaction price before the promotion.

 

Discount must be Traceable; Price must be Real; Impact on Scanning Software

If this draft for comments is implemented, what impact will it have on wine merchants? In this regard, WBO interviewed Chunxiang Zhao, a lawyer from Beijing Junzejun (Nanjing Branch) Law Firm. Chunxiang Zhao pointed out: The new content is mainly focused on price comparison and promotion. The core content is the provisions of Article 4 - Operators who carry out price comparisons and promotions, should retain relevant evidence for verification.

 

“For example, if a wine merchant makes a 50% discount on a certain item on one day and the discounted price is CNY 500. The merchant must prove that the product was sold for CNY 1,000 before. If it was sold below CNY 500, it is suspected a price fraud." Chunxiang Zhao said.

 

Chunxiang Zhao believes that once the new regulations are passed, there will also have a certain inhibitory effect on the price comparison software. Nowadays, many people sell wines based on the code price. However, people in the industry know that some code prices are jointly produced by wine merchants and can code software, who do not generate transaction prices at all. The new rules need to be based on real prices practiced. This is likely to cause conflicts between new rules and code scan software.

 

 

Difficulty Exists for Effective Wine Supervision

As we all know, the price of some products is very chaotic in the fragmented Chinese wine market, and mismatched price is a common problem. Some wine merchants with serious trade mind turned the price of European table wine to CNY 688, CNY 888, or even CNY 1688 to make the products look better and more versatile. This action undoubtedly hurts the credibility of the entire industry.

 

Will the above situation be effectively avoided once the regulations are passed? In this regard, Dehui Wang, the general manager of Shenzhen Zhide Marketing Planning Company, thinks the situation is not optimistic. He pointed out: It is definitely good for the industry, but there are certain difficulties in the supervision of the market.

 

“After all, the pricing power is still in the hands of the operators. The wine industry is very fragmented. Many liquor store adjust easily on wine prices. Supervising the most popular group purchase channels are more difficult for the relevant departments. " explained Dehui Wang," For example, the original price of a bottle of wine at the liquor store is CNY 100. The merchant wants to sell CNY 80 but to promote as 50% off discount. The wine can be sold to CNY 160 7 days in advance."

 

Similarly, even if the price is not compared through the scanning software, the merchants can open an online store in Taobao or JD, and sell at high price. Chunxiang Zhao believes in this case price fraud does not exist, because the new legislation requires merchants to compare with themselves at the same place and at different times. If it is a different store from the same merchant, as long as the price is real, it is difficult to determine the price fraud.

 

Dehui Wang pointed out: From the perspective of branding, companies that truly establish brands will have price control. After all, chaotic price is harmful to brands, although there are a lot of trade thinking products on the market. If the new legislation is passed, it can only play a deterrent role in the law. In depth, the new regulations still need to be improved.