Ng Fung Hong refutes charges of profiteering over beef monopoly
Updated: 2013-01-15 06:51
By Fan Feifei(HK Edition)
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Ng Fung Hong, the city's sole importer of live cattle from the mainland, has countered charges that the company is profiteering by arguing that a recent surge in fresh beef prices results from a supply shortage across the border. Responding to complaints about frequent increases in beef prices of late and an instability of local supply from retailers, Ng Fung Hong said it is operating at a small profit margin.
Representatives of the retail beef industry were quick to disagree with the company's rebuttal and renewed calls for an end to Ng Fung Hong's monopoly on wholesale beef.
In its statement on Monday Ng Fung Hong declared the turnover of live cattle last year reached about HK$396 million. However, the gross margin was only HK$12 million, less costs of transportation and commission. The company said it imported 23,194 live cattle last year.
The sole distributor of mainland beef in Hong Kong raised the retail price of beef to more than HK$100 per catty in December 2012, the sixth price increase last year.
Ng Fung Hong also attributed the price hike to the increase in prices on the mainland, because of strong demand for beef across the border and the need to ensure the quality of cattle brought to Hong Kong.
Lawmaker Wong Kwok-hing from the Hong Kong Federation of Trade Unions challenged the numbers provided by Ng Fung Hong are difficult to accept. He said, "the price of live cattle in Shenzhen is about 30 to 40 percent cheaper than in Hong Kong. If the price of live cattle on the mainland has increased due to the strong demand from the mainland market, why is the price in Shenzhen still much cheaper than in Hong Kong?"
He claimed the price increases are the result of Ng Fung Hong's monopoly on the live cattle market, adding the wholesale price of beef is decided by the company and the continuous increases in the price showed the company was "irresponsible" towards Hong Kong citizens.
Wong added, the HKSAR government and the country's Ministry of Commerce had agreed that Ng Fung Hong would be the sole agent for the import of live cattle, so he and representatives from the industry have sent a letter to the Hong Kong Deputies to the National People's Congress (NPC) calling for the market to be opened to allow more importers to take part.
Hui Wai-kin, chairman of the Fresh Beef Traders Alliance, said the wholesale price of beef went up 40 percent to 50 percent from July to December last year.
He suggested the government take away the monopoly in the market, as it had done in the pork industry, when two additional importers were allowed into the market in 2007. The price of pork has been relatively stable since then, he noted.
Hui warned it was expecting a quarter of the 500 players in the retail meat market to go out of business after the Spring Festival because few consumers are willing to pay the high prices for beef.
Secretary for Food & Health Ko Wing-man said earlier this month that the government will commission a consultant to conduct a market survey on the quality and cost of fresh beef in Hong Kong and in nearby mainland cities and will take them carefully into consideration when examining whether to open up the live cattle wholesale market.
(HK Edition 01/15/2013 page1)