The Hong Kong Competition Authority launches first enforcement proceedings in relation to resale price maintenance (Tien Chu)

Introduction On 15 September 2022, the Competition Commission (Hong Kong) (the “Commission”) commenced its first enforcement proceedings in relation to resale price maintenance (“RPM”) arrangements against a food manufacturer, The Tien Chu (Hong Kong) Company Limited (“Tien Chu”). What is RPM? RPM occurs when an upstream supplier (e.g. a manufacturer) tries to set a price, or imposes a minimum price, at which its customer (e.g. a distributor or a retailer) can sell goods or services. More indirectly, RPM happens through fixing the distributors’ margin or the maximum level of discount that the distributor can grant. Suppliers may use threats, intimidation, warnings, penalties, delays, or the outright suspension of deliveries, to induce distributors to fixing a price, ultimately