INDIVIDUAL ASSIGNMENT

PRICE FIXING CASES

LORD BUDDHA EDUCATION FOUNDATION
SAGAR AGRAWAL (NP000008)
COMMERCIAL LAW (BM062-3.5-2)
LECTURER: ATIT RIJAL
NP2F1701BM

HANDS OUT DATE: 10TH SEPTEMBER, 2017

HANDS IN DATE: 30th NOVEMBER,2017

WEIGHTAGE: 40%

WORD COUNT: 1077 Words

INSTRUCTIONS TO CANDIDATES

1. Submit your assignment at the administrative counter

2. Students are advised to underpin their answers with the use of references (cited using the
Harvard Name System of Referencing)
3. Late submission will be awarded zero (0) unless Extenuating Circumstances (EC) are
upheld
4. Cases of plagiarism will be penalized
5. The assignment should be bound in an appropriate style (comb bound or stapled).
6. Where the assignment should be submitted in both hardcopy and softcopy, the softcopy
of the written assignment and source code (where appropriate) should be on a CD in an
envelope / CD cover and attached to the hardcopy.
7. Pass mark is 50%.
Acknowledgement
I would like to express a deep appreciation to Lord Buddha Education Foundation (LBEF)
affiliated to Asia Pacific University faculty of management for making this project mandatory
requirement in Bachelor.

Writing this report happens to be one of the greatest achievements in this phase of my life. I am
thankful to my Lecturer Atit Rijal who helped me in fulfilling this project.

At last but not least, I am highly indebted to my friends for their guidance in the preparation of
this project. I also extend hearty thank for those people who have helped me directly and
indirectly to prepare this project.

2
Executive summary

In the partial fulfillment of the project of fourth semester titled “Commercial Law” for the
requirement of the degree of BBM, I have completed this project with the help of different sites
that have mentioned in the references, and also the classes I had attained, and with my own
personal view.

The report is focused on the Malaysian public company (Pharmaniaga) the healthcare sector,
which was established in1980 in Malaysia, which provides different healthcare facilities to the
patients, in which I have recommend two types of financing for the company for the expansion
of its business. Along with this I have also related 3 cases related to the price fixing in Malaysia,
and also how price fixing is considered as “anti-competitive”.

And lastly I have drawn the conclusion, along with the references.

3
Contents
1.) Introduction............................................................................................................................................1
1.1) Types of financing to expand business.............................................................................................1
2.) Price fixing cases....................................................................................................................................2
2.1) Case1- British Dairies Milk the Customers' Wallets.........................................................................2
2.2) Case 2-British Airways Gives Fuel Prices a Hike............................................................................3
2.3) Case 3-Whirlpool, rivals face price fixing probe..............................................................................3
4) Conclusion..............................................................................................................................................5
Bibliography................................................................................................................................................6
Marking Criteria..........................................................................................................................................7

4
1.) Introduction
Pharmaniaga Berhad is the largest listed integrated pharmaceutical group, which was established
in 1980 in Malaysia. Pharmaniaga Berhad has blazed a trail within the healthcare industry as a
provider of quality products and services. Listed on the Main Board of Bursa Malaysia and
having established itself as a leader in the local market, Pharmaniaga also has a growing global
presence.

The company as part of the drive is to become a total integrated healthcare solutions provider,
the core businesses span across a wide spectrum of the industry. This includes logistics and
distribution, manufacturing of generic pharmaceuticals, sales and marketing, as well as
distribution of medical products and hospital equipment. Drawing upon the synergies of these
activities, Pharmaniaga has expanded its reach to Malaysians through the establishment of
community pharmacy.

The heart of the Pharmaniaga, corporate philosophy is driven by the motto, Passion for Patients.
Above all, the company emphasize on delivering the promises to the clients with the highest
standards of excellence, as they seek to create a lasting legacy of doing business with a
conscience[ CITATION Tea16 \l 1033 ]. 

1.1) Types of financing to expand business

Different types of financing that the “Pharmaniaga” may consider expanding its business are
listed below:

1. Bootstrap financing:-

Bootstrap financing is probably one of the best and most inexpensive routes an entrepreneur can
explore when raising capital. Pharmaniaga can follow bootstrap financing because it utilizes
unused opportunities that can be found within the company by simply managing the finances
better. Bootstrap financing is a way to pull the company up without the help of others. Company
are the one that finances the growth by current earnings and assets[CITATION 167 \l 1033 ].

1
2. Debt financing:-

When a company borrows money to be paid back at a future date with interest it is known as
debt financing. It could be in the form of a secured as well as an unsecured loan. A firm takes up
a loan to either finance a working capital or an acquisition.

Debt means the amount of money which needs to be repaid back and financing means providing
funds to be used in business activities. An important feature in debt financing is the fact that the
company are not losing their ownership. That is why the researcher has recommended to use debt
financing for their business growth[ CITATION Ben17 \l 1033 ].

2.) Price fixing cases

Price fixing is when two entities, usually companies, agree to sell a product at a set price. They
do this to maintain profit margins.  It's easiest for monopolies to fix prices. They operate without
competitors that could offer products at lower prices[ CITATION Kim17 \l 1033 ].

2.1) Case1- British Dairies Milk the Customers' Wallets

In late 2007, British fans of milk and cheese got some bad news: their
supermarkets and milk suppliers had been illegally rigging the prices of dairy
products since 2002. The Office of Fair Trade learned that many of the U.K.'s
largest supermarket chains had been colluding to raise the prices of dairy
products, and their milk distributors, namely Dairy Crest and Robert Wiseman
Dairies, had been the go-betweens for the ostensibly secret pricing decisions.

The anti-competitive behavior supposedly cost customers close to 270 million

pounds over the course of the scam, and the companies involved faced fines
that maxed out at a combined 116 million pounds [ CITATION Eth09 \l 1033 ]

2
2.2) Case 2-British Airways Gives Fuel Prices a Hike

The soaring fuel prices gripped the travel industry. British Airways found a less-than-
scrupulous way for the rising prices to help pad its bottom line. When airlines started
tacking fuel surcharges onto passengers' flight costs, someone apparently saw a way to
make some quick cash.

In 2004, the airline entered into secret talks with its rival Virgin Atlantic to
simultaneously bump up their fuel surcharges, a practice that continued into 2006. Over
the course of the collusion, fuel surcharges rose from an average of five pounds a ticket
to over 60 pounds a fare.

When Virgin Atlantic's lawyers realized what the company had done, they did the only
thing they could do: they ratted out British Airways. Virgin ended up getting immunity
for providing the goods on its former partner in collusion, while BA got walloped with
record fines. The British Office of Fair Trading nailed the airline for 121.5 million
pounds, while the American Department of Justice smacked it with an additional $300
million fine [ CITATION Eth09 \l 1033 ].

2.3) Case 3-Whirlpool, rivals face price fixing probe

Michigan business news in brief: whirlpool, rivals face price fixing probe on February 19, 2009
Detroit free press.

Wired PR News-Microsoft corp. has been fined for alleged price fixinhg.as reported by the
Associated Press (AP), the company’s German subsidiary was fined 9 million euros, which is the
equivalent of $11.8million, for purportedly illegally influencing the retail prices for their
Microsoft Office 2007 software programs, on April 13, 2009[ CITATION Jam10 \l 1033 ].

3
3) Price fixing as Anti-competitive

Price fixing considered as anti-competitive because the price fixing creates misbalance of the
product price in the market. The Act prohibits anticompetitive business practices that promote
inefficiency and inequity in the marketplace. Price fixing is when business rivals enter a
collusive agreement to refrain from price competition to fix the price of a good or service.
Companies can distort competition by cooperating with competitors, fixing prices or dividing the
market up so that each one has a monopoly in part of the market. Anti-competitive agreements
can be open or secret[ CITATION Has08 \l 1033 ].

4
4) Conclusion
In conclusion, the Pharmaniaga is the healthcare sector which is public limited company. Being a
healthcare company, the company can relate this financing because it matches the company
profile, which I have already mentioned above. Relating this financing, the company can
increase its profitability and expand its business.

Price fixing is an agreement between participants on the same side in a market to buy or sell a
product, service, or commodity only at a fixed price, or maintain the market conditions such that
the price is maintained at a given level by controlling supply and demand. The above cases is
related to price fixing. Due to price fixing in the market there is unfair trade practices, and also
evaluate the market which is the one of the illegal act in commercial law.

The researcher has already explained the cases above in this research paper, as per the cases I
have discussed we can analyze and conclude that Price fixing is an illegal act which fluctuates
the market create monopoly for certain company.

5
Bibliography
Amadeo, K., 2017. [Online]
Available at: https://www.thebalance.com/price-fixing-types-examples-why-it-s-illegal-3305955

Bennett, C. &. C. L., 2017. [Online]

Available at: https://economictimes.indiatimes.com/definition/debt-finance

Business, 2016. [Online]

Available at: https://www.entrepreneur.com/article/80204

Glader, J. R. H. A. P., 2010. [Online]

Available at:
https://www.wsj.com/articles/SB10001424052702304173704575578510128685620
[Accessed 5 9 2017].

Qaqaya, H., 2008. [Online]

Available at: http://unctad.org/en/docs/ditcclp20082_en.pdf
[Accessed 5 9 2017].

Team, 2016. [Online]

Available at: http://www.pharmaniaga.com/index.php/profile

Trex, E., 2009. [Online]

Available at: http://mentalfloss.com/article/22843/5-brazen-examples-price-fixing

6
Marking Criteria
Assessment Obtain Marks

Content (40)

Research(20)

Literature Review(20)

Referencing and Citation(10)

Overall Structure(10)