A top jewelry retailer has waived a 2 percent commission on its products, ending a practice that has been in effect in the gold retail business for half a century.
Chow Sang Sang Holdings International Ltd. (00116.HK) canceled the commission after the anti-trust law took full effect earlier this month, the Hong Kong Economic Journal reported Tuesday.
Under the law, retailers are required to let prices float and are prohibited from fixing the prices of products.
However, rival jewellers, including Chow Tai Fook Jewellery Group Ltd. (01929.HK), Luk Fook Holdings International Ltd. (00590.HK) and Lao Feng Xiang Co. Ltd. (600612.HK), said they will not follow suit.
Luk Fook chairman and chief executive Wong Wai-sheung said Chow Sang Sang’s move is not expected to trigger a price war among gold retailers as they can always factor in the commission to the final prices.
The high cost of operation in Hong Kong is another factor that will prevent gold retailers from engaging in a price war, Wong added.
Chow Tai Fook and Lao Feng Xiang, meanwhile, said they will maintain the commission system, although the latter said it may waive the fee for loyal clients.
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