State-sponsored monopoly on live pig imports gives sole source an advantage paid for by the consumer ; Part 4 - Border crossings
In Cantonese cuisine anything on four legs is edible except the table, or so the saying goes. But of all the various creatures that would appear fair game, Hong Kong diners most often sink their teeth into plain old pork. On a per capita annual basis, Hong Kong ranks among the top five places in the world for consumption of pork, typically outpacing even markets like sausage-crazed Germany.
It would seem local pig traders should be wallowing in profits, but the opposite is true. Recent years have seen them squealing under a margin squeeze. One firm, however, possesses a golden piggy bank. Ng Fung Hong, a subsidiary of red-chip China Resources, has enjoyed a monopoly on all imports of live mainland swine to Hong Kong since the 1950s when it was appointed as sole agent by China's Ministry of Commerce.
The reach of any Hong Kong competition law, no matter how broadly conceived, would run into difficulties at the border. But the growing interconnectedness of the Hong Kong and mainland economies has brought an explosion in the cross-boundary flow of goods and services. Companies from both places are increasingly active in - if not dependant on - the adjacent market.
At the same time, officials in Beijing have rolled out a series of consumer-protection laws and currently have major antimonopoly legislation in the pipeline. All of which complicates a discussion of the effects a Hong Kong competition law would have on cross-border business activity.
Import monopolies like that enjoyed by Ng Fung Hong pose a particular challenge. Such an arrangement by design limits competition and may not be in the best interests of consumers. But because it is a product of government policy, it would likely fall beyond the scope of a competition law.