Chinese netizens laud fines against liquor giants
Shanghai, Feb 20 : Regulators have hit Moutai and Wuliangye, two of China's liquor giants, with record penalties of 449 million yuan (USD 71.9 million) for price fixing, a move hailed by Chinese netizens.
The two alcohol makers were ordered to pay 247 and 202 million yuan, respectively, in fines, China's top economic planning body said Tuesday.
The fines accounted for one percent of total sales revenue of the two companies in 2012, reported Xinhua citing the National Development and Reform Commission (NDRC).
It marks the harshest punishment since China's first anti-monopoly law was enacted in 2008, followed by fines slapped on Samsung, LG and four Taiwanese flat panel makers of 353 million yuan in January for the same reason.
The move became one of the hottest topics of discussion on the Internet, with most netizens supporting the punishment.
"The fine is not just about the money record, but punishing giant companies. No matter how big they are, they will face penalties once their market behaviour is found to be illegal," said a user with the screen name "Yu Fenghui" on Sina Weibo, the Chinese equivalent of Twitter.
However, some Weibo users think the punishment could be harsher considering the firms' profits and market share.
"It's too little for the two giants. Punitive fines should go after confiscation of illegal profits," said one Sina Weibo user.
"It's harsh in terms of the fine amount, but gentle in terms of the portion they are currently holding," said another.
Under China's anti-monopoly law, a company can be fined one to ten percent of its total sales revenue of the previous year plus see its illegal profits confiscated if found guilty.
The fines take up about two percent of the net profit of Moutai and Wuliangye in 2012, which are estimated to have reached 13.1 and 9.5 billion yuan respectively.
The punitive measures came after regulators investigated and found in January that the two firms were involved in a price monopoly.
Some other netizens urged regulators to impose tougher punishment on companies for similar illegal conduct and expand supervision of other potentially monopolist sectors such as telecommunications and oil.