Chow Tai Fook among firms in price fixing probe

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Hong Kong business says its prices are based on daily gold markets.

Chow Tai Fook, the world’s largest jewellery retail group in terms of market value, has come under investigation for possible price fixing.

The business is one of a number of gold jewellery retailers in the Far East being investigated after a group of stores admitted to authorities that they had "colluded on prices". The news was first reported on the official website of the People’s Daily newspaper.

Chow Tai Fook posted a statement on its website late on Friday stating that it follows "its own gold pricing mechanism, and is not subject to the constraints or restrictions of any association or other jewellery retailers."

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The People’s Daily newspaper states that China’s National Development and Reform Commission was looking in to cases of price manipulation by a number of jewellery retailer in Shanghai. The newspaper’s online report was later reposted on a government website, stating that several shops had admitted to authorities that they colluded on prices.

According to Reuters shares in Chow Tai Fook fell as much as 6% on Friday, while fellow jewellery firm Chow Sang Sang’s shared dropped by 5%.

According to reports it is market practice in China for major jewellers to agree on a daily price for gold. Products are priced up to 15% higher than international gold prices to account for processing and craftsmanship fees.
 

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