China's top price regulator has imposed penalties on a local gold and jewelry industrial association and five jewelry firms in Shanghai for price-fixing practices, China News Service reported Monday.
The National Development and Reform Commission (NDRC) fined Shanghai Gold & Jewelry Trade Association (GJTAS) a total of 500,000 yuan for manipulating retail prices of gold jewelry products, the report said.
Five jewelry firms including Shanghai Laofengxiang Co, Chenghuang Jewellery and Shanghai First Asia Jewelry were fined 10.09 million yuan ($1.6 million), an equivalent of 1 percent of the annual sales of the five firms, it said.
Meanwhile, an official at the NDRC revealed during a program recording at Central Television Station (CCTV) Monday that GJTAS and the five jewelry companies were fined by 10.09 million yuan for price-fixing, according to the official microblog of CCTV Financial Channel.
The reports follow the NDRC's announcement last week to impose a record fine of nearly 670 million yuan on six infant formula producers for price-fixing.
The NDRC did not respond to a fax inquiry sent by the Global Times by press time Monday.
"The gold jewelry markets in China are generally aligned with the international gold market, and domestic gold prices fluctuate along with the changes in the international market," Wang Ruilei, chief analyst at Chengdu-based Boyin Precious Metal Investment, told the Global Times Monday.
According to Wang, there are special circumstances where the demand exceeds supply, offering room for gold and jewelry firms to manipulate prices, causing price distortions in the market.
"The penalty on the association and the five firms is small compared with the large profit margin for the industry but could serve as a deterrent to such price-fixing practices," Wang said.
According to people.com.cn in July, the NRDC and its Shanghai branch had investigated the GJTAS and 13 gold firms in May and June for price-fixing.
