Original title: fined nearly 300 million yuan. What did "Jack One" do wrong? Source: Beijing Business Daily
It has lasted more than 4 months, "the elder brother of socket" Bull Group The antitrust case was finally settled. On September 27, Bull Group announced that it had been fined about 295 million yuan for violating the anti-monopoly law. It is reported that this case is the largest anti-monopoly "fine" issued by the Market Supervision Bureau of Zhejiang Province (hereinafter referred to as "Zhejiang Municipal Supervision Bureau") since the institutional reform. In the view of insiders, Bull Group was punished for violating the law, breaking its monopoly on price, and its advantage of price control and profit disappeared. With the intensification of the competition in the socket market, Bull Group will face no small challenge.
Receive a fine of 300 million yuan
According to the Bull Group's announcement, the Group received the Letter of Decision on Administrative Penalty issued by Zhejiang Municipal Administration of Supervision on September 27. Bull Group violated Article 14 of the Anti monopoly Law of the People's Republic of China, which prohibits operators from entering into the following monopoly agreements with trading counterparts: (1) fixing the price of goods resold to a third person; (2) Limiting the minimum price of goods resold to a third party "constitutes the act of entering into and implementing a monopoly agreement with the counterparty.
Zhejiang Municipal Bureau of Supervision ordered Bull Group to stop its illegal activities and imposed the following administrative penalties: imposed a fine of 3% of 9.827 billion yuan of China's domestic sales in 2020, totaling 295 million yuan.
Although Bull Group did not disclose details in the announcement, the reporter of Beijing Business Daily learned from the punishment announcement issued by Zhejiang Municipal Bureau of Supervision that since 2014-2020, Bull Group has been working in the converter, wall switch socket LED lighting, digital accessories and other power connections and power consumption extended product sales channels reached and implemented monopoly agreements with trading counterparts (dealers) to fix and limit prices, which excluded and limited market competition and damaged consumer interests.
It is understood that monopoly can be roughly divided into vertical monopoly and horizontal monopoly. Horizontal monopoly is the combination of multiple manufacturers. Vertical monopoly, also known as price monopoly, is the act of unifying prices within a single manufacturer. Bull Group is in violation of vertical monopoly.
In this regard, Liu Junhai, a professor of Renmin University of China Law School, said that the price control monopoly of Bull Group inhibited the role of the market in the allocation of resources. The price should be determined by the equal game and rational negotiation between the supply and demand parties, rather than the unilateral decision of the manufacturer. Fixing the price of resale commodities violates the principle of freedom of contract. The price should be determined by the buyer and the seller. Bull Group has no right to fix the price unilaterally.
As for this violation of the anti-monopoly law and price control, the reporter of Beijing Business Daily conducted a telephone interview with Bull Group, but as of the time of press release, the phone has not been connected.
In fact, the antitrust investigation of Bull Group started in the first half of this year. On May 12, Bull Group announced that on May 11, the company received the Letter of Zhejiang Provincial Market Supervision Administration on Reporting Bull Group Co., Ltd.'s Suspicion of Entering into and Implementing Monopoly Agreements with Trading Counterparties from Zhejiang Municipal Supervision Bureau. Zhejiang Municipal Supervision Bureau "decided to file an investigation on Bull Group's Suspicion of Entering into and Implementing Monopoly Agreements with Trading Counterparties."
However, in the prospectus previously issued by Bull Group, it disclosed that "the company determines the price guidance system by comprehensively considering the market positioning of products, the brand positioning and influence, the past price of similar products and the price of similar products in the market, and determines the supply price of the company to dealers according to the evaluation of product competitiveness and reasonable profits in the circulation link".
In addition to price control monopoly, Bull Group also has the situation of exclusive marketing. In its prospectus, Bull Group has disclosed that in terms of the core converter business, dealers are required to exclusively sell sockets of other brands, that is, dealers can no longer sell sockets of other brands; In terms of wall opening, dealers in municipalities directly under the Central Government, cities specifically designated in the state plan, and provincial capital cities are also specialized. At the same time, in the official joining conditions of Bull Group, the franchisee is also required to "highly recognize Bull's business philosophy and be willing to abide by the exclusive marketing rules".
Increased competition
Although Bull Group said in the announcement that this punishment would not have a significant impact on the company. However, according to its announcement, the amount of this punishment is expected to reduce Bull Group's profit in 2021 by 295 million yuan. In the view of Bao Yuezhong, a new retail expert in the FMCG industry, the huge punishment will bring greater warning to enterprises, and will greatly reduce this monopoly behavior of large enterprises in the future development of the industry.
In Liu Junhai's view, this kind of monopoly behavior can make some enterprises profit even without paying attention to product research and development and weak competitiveness.
How long the monopoly lasts, and the specific impact on the operation of Bull Group is unknown, but it has been heard that the development of Bull Group in recent years has a certain relationship with its monopoly behavior. On February 6, 2020, Bull Group was listed in A-share market. In only 9 days, its market value broke from about 50 billion yuan to 100 billion yuan, and exceeded 150 billion yuan at the highest. In addition, under the influence of the epidemic, Bull Group's performance in 2020 is relatively stable. The report shows that the company's annual revenue is 10.051 billion yuan, up 0.11% year on year; The net profit was 2.312 billion yuan, up 0.42% year on year.
In the view of the industry, after being fined for monopoly, this price control and exclusive marketing model will not work, and Bull Group's performance may be affected to some extent.
It is understood that at present, Bull Group is facing many challenges in the socket market. In its prospectus, Bull Group listed Xiaomi and Philips, an established manufacturer, as competitors. It is understood that the sales channels of millet products have been fully covered Online and offline To benefit from its own channel advantages, millet sockets can be seen everywhere. According to some data, the first plug with USB fast charge launched by Xiaomi in 2015 has become a hit since it came into the market. At the same time, Deli and Philips have also continued to layout the socket market, which poses a certain challenge to Bull Group.
Squeezed by multi competition, the revenue growth of Bull Group in 2017-2020 continued to decline. Data shows that in 2017-2020, the revenue of Bull Group was 7.24 billion yuan, 9.065 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.
In the 2020 annual report, Bull Group said that it expected that the civil electrician and lighting industry would maintain a more competitive state, and the evolution of the market competition pattern was uncertain. If the company could not adapt to the new competitive situation, consolidate and expand the original competitive advantage, it would face the risk of losing market share.
In terms of stock price, since the announcement on May 12 this year was subject to antitrust investigation, the stock price of Bull Group once rose in shock. However, since the middle of July, the stock price of Bull Group began to decline all the way. By the end of September 27, the stock price had reached 163.99 yuan, 13% lower than before the antitrust investigation. At present, the total market value of the company is 98.6 billion yuan.
Bao Yuezhong said that with the break of the monopoly, the so-called price control and profit advantage of Bull Group is no longer there, and the competition in the socket market is becoming increasingly fierce. Bull Group obviously has a big challenge to maintain its leading position in the market, and it will also need to increase the quality control of product research and development.
Beijing Business Daily reporter Guo Xiujuan Zhang Junhua
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