Jewellery chain store Chow Sang Sang Jewellery Group Ltd. has scrapped its 2% commission levied on customers on sales of gold and platinum. They stated that the move was timed in response to the full implementation of the Competition Ordinance earlier this month but not as a direct consequence of it.
On the store’s website, the page on the Hong Kong Gold Price said: “Starting on 28th December 2015, all transactions in gold/platinum products will be free of commission.”
The price of gold jewellery in Hong Kong has been made up of the daily gold price, handicraft fee and commission. In the local gold market, almost all jewellery retailers charge a commission that is 2% of the gold price.
As of Monday, the daily gold price listed by Chow Sang Sang was HK$11,700 per tael. A gold necklace that weighed 3.4 taels would cost HK$43,520, with HK$39,780 as the basic gold price and HK$3,740 as the handicraft fee. With the 2% commission, the price would have come to HK$44,316, which was more expensive than the new price by HK$796, Apple Daily reported.
A spokesperson for Chow Sang Sang told Ming Pao that the commission was scrapped to simplify the pricing, so customers could calculate the price easily, and that this would therefore boost the company’s competitiveness. The spokesperson also said the company had planned the cancellation for a long time, and the implementation of the Competition Ordinance provided an appropriate time to make the change.
The Competition Ordinance came into effect on December 14. It forbids anti-competitive behaviour, such as price fixing, sharing market information, bid rigging or restricting output.
With the new law, trade associations which issue suggested pricing could violate regulations on price collusion. The Hong Kong Jewellers’ & Goldsmiths’ Association and the Kowloon Pearls, Precious Stones, Jade, Gold and Silver Ornament Merchants Association both stopped listing the daily jewellery gold price for goldsmiths in Hong Kong to follow on December 21 and 16 respectively, AM730 reported.
A sales assistant, surnamed Shek, at Man Shing Goldsmith Company Ltd. told Apple Daily that since they mainly target regular customers, Chow Sang Sang’s action had little effect on them.
Chairman and Chief Executive of Luk Fook Jewellery Wong Wai-sheung told Apple Daily that he believed Chow Sang Sang’s new practice had nothing to do with the new Competition Ordinance.
Both Luk Fook and Chow Tai Fook said they have no plans to cancel the commission.