On September 28, more than four months after the case was filed for investigation, the monopoly case of China’s A-share “outlet king” Bull Group (603195.SH) finally came to fruition.
On the evening of September 27, the Bull Group issued an announcement stating that the company received the “Administrative Penalty Decision” issued by the Zhejiang Provincial Market Supervision and Administration Bureau on September 27, 2021 (Zhe City Supervisory Case [2021] No. 4). For violating the anti-monopoly law, he was fined 3% of China’s domestic sales in 2020, totaling 294.81 million yuan.
The Zhejiang Market Supervision Bureau believes that the parties of Bull Group Co., Ltd. violated Article 14 of the Anti-Monopoly Law of the People’s Republic of China, which prohibits the operator and the counterparty from reaching the following monopoly agreements: (1) Fixed reselling of goods to third parties (2) Limiting the minimum price for resale of commodities to a third party” stipulates that it constitutes an act of reaching and implementing a monopoly agreement with the counterparty of the transaction.
The Zhejiang Market Supervision Bureau stated that in view of the Bull Group’s active cooperation during the investigation and a deep understanding of the harm of monopolistic behavior, in accordance with the provisions of Article 46, Paragraph 1 and Article 49 of the Anti-Monopoly Law of the People’s Republic of China, The parties were ordered to stop the illegal acts and the parties were decided to impose the following administrative penalties: a fine of 3% of the domestic sales of 9.827 billion yuan in 2020, a total of 294.81 million yuan. The party concerned shall turn in the fine and confiscation within 15 days from the date of receipt of the penalty decision.
It can be seen from the penalties that the Bull Group fixed sales prices to distributors. This is actually a common sales behavior of manufacturers in order to maintain the price system. Many manufacturers explicitly or implicitly require distributors to unify prices, but this behavior is Think it’s not conducive to competition.
The public generally believes that monopoly means that some leading manufacturers set a high price after rejecting dissidents in order to grab excess profits, or that several manufacturers unite to avoid competition. In fact, the concept of monopoly is very rich. A manufacturer with a monopoly position may not necessarily be a monopoly. The key is to see whether there is anti-competitive behavior.
The Bull Group stated that since the company received the notification of the antitrust investigation, the company immediately established an antitrust compliance self-examination and rectification team headed by the chairman and president to organize comprehensive internal self-examination, rectification and implementation. Continuously strengthen the legal awareness and responsibility awareness of enterprises and related personnel, and operate in compliance with laws and regulations, achieve sustainable and high-quality development, and create continuous value returns for investors.
Penalties are imposed based on revenue. The above penalties account for 3.23% of the company’s most recent audited net assets and 12.74% of the company’s most recent audited net profits. The Bull Group stated that the penalty is expected to reduce the company’s 2021 profit by 294.81 million yuan, subject to the results of the annual audit confirmed by the accountant. He also stated that the above-mentioned penalties will not have a significant impact on the company’s production, operation and sustainable development, and that the company and its subsidiaries are currently in normal production and operation.
Suspected monopoly was investigated in May
On May 11, 2021, the Bull Group received the Zhejiang Provincial Market Supervision Administration’s “Letter from the Zhejiang Provincial Market Supervision Administration on Reporting the Bull Group Co., Ltd.’s suspected of reaching and implementing a monopoly agreement with the counterparty of the transaction”, Zhejiang The Provincial Market Supervision Administration “decided to file an investigation into the suspected conduct of the Bull Group Co., Ltd. in reaching and implementing a monopoly agreement with the counterparty of the transaction.”
The Bull Group stated that it will actively cooperate with the Zhejiang Provincial Market Supervision and Administration Bureau in the investigation of anti-monopoly cases in accordance with relevant Chinese laws, to be a responsible and responsible enterprise, to operate in compliance with laws and regulations, and to continuously improve its operating quality and sustainable development. Value return level. The current production and operation are all normal, and the information disclosure obligation will be fulfilled in a timely manner based on the follow-up progress.
According to the annual report data previously disclosed by the company, in 2020, the Bull Group achieved operating income of 10.05 billion yuan, an increase of 0.11% year-on-year; realized net profit of 2.313 billion yuan, an increase of 0.42% year-on-year; realized non-net profit of 2.222 billion yuan, a year-on-year increase Reduce by 0.08%. .
It is worth noting that from the related financial report performance previously disclosed by the Bull Group, its revenue growth has continued to decline. From 2017 to 2020, Bull Group’s revenue was 7.24 billion yuan, 9.65 billion yuan, 10.04 billion yuan, and 10.05 billion yuan, with growth rates of 34.91%, 25.21%, 10.76%, and 0.11%, respectively. The revenue growth rate was significantly slower. slow.
Bull Group also stated in its 2020 annual report, “The company expects that China’s civil electrical and lighting industries are expected to maintain a relatively fierce competition. There are uncertainties in the evolution of the market competition pattern. If the company cannot adapt to the new competitive situation, it wouldn’t be able to consolidate and expand the original competitive advantage, and would face the risk of loss of market share.” Source