Why violate the Anti Monopoly Law?, Four major pig farming giants sign the "gentleman's agreement" initiative | convention | agreement

On June 20th, at the 18th Pig Festival Co creation and Sharing Forum, Muyuan Group, together with Wen Group, Twin Group, and Zhengda Group, issued an initiative to the industry and signed the "Non poaching Convention". This agreement resulted in four pig farming giants being collectively interviewed by regulatory authorities.

On July 31st, the State Administration for Market Regulation interviewed the four enterprises mentioned above and pointed out that as initiators, they signed the "Mutual Non poaching Convention", advocating for non poaching and non dismantling, which violates the spirit of the Anti Monopoly Law and is not conducive to building a unified national market.

After being interviewed, the four pig farming giants, Muyuan, Wen, Twins, and Zhengda, immediately issued a joint statement to withdraw the initiative. What are the problems with the seemingly "gentleman's agreement" of the "non poaching agreement"?

The Non poaching Convention restricts the right of workers to freely choose their jobs

The four major pig farming giants mentioned in the "Mutual Non poaching Convention": "In order to reduce internal competition and promote civilized development, I propose: no poaching, no dismantling. If there is a breach of contract, double the countermeasures."

Li Hongjiang, Senior Partner and Director of the Intellectual Property Business Committee of Beijing Guantao Zhongmao Law Firm, pointed out in an interview with China News Service Guoshi Direct that the core of market competition is "openness, fairness, and impartiality". The private signing of relevant agreements by pig farming giants has led to behaviors that hinder competition.

Li Hongjiang said that from the perspective of workers, employees have the freedom and right to choose their jobs and should not be discriminated against; From the perspective of the general public, the legal movement of workers can not only promote competition, but also increase public welfare.

He introduced that the general usage scenarios of the Anti Monopoly Law are penalties for three types of monopoly behaviors: monopoly agreements, concentration of operators, and abuse of market dominance. Monopoly agreements generally include horizontal agreements, vertical agreements, and axial agreements, among which horizontal agreements mainly prohibit operators with competitive relationships from signing collaborative agreements that exclude and restrict competitive relationships.

Therefore, if operators with competitive relationships sign horizontal monopoly agreements, such as the "Non poaching Convention" and other initiatives, it will to some extent limit the freedom of workers to choose their jobs, which falls within the scope of punishment under the Anti Monopoly Law.

At the same time, the Anti Monopoly Law has made clear provisions on the punishment of monopolistic agreement behavior.

Article 56 of this law clearly stipulates that if a business operator signs and implements a monopoly agreement, the anti-monopoly enforcement agency shall order the cessation of illegal activities, confiscate illegal gains, and impose a fine of not less than 1% but not more than 10% of the previous year's sales revenue. If there is no sales revenue in the previous year, a fine of not more than 5 million yuan shall be imposed; Those who have not yet implemented the monopoly agreement may be fined up to three million yuan. If the legal representative, main person in charge, and directly responsible personnel of the operator are personally responsible for reaching a monopoly agreement, they may be fined up to one million yuan.

Why did pig farmers agree not to poach people from each other?

Industry experts say that the sluggish atmosphere in the pork market is behind the Non poaching Convention. The first half of the year performance reports recently disclosed by A-share pig farming companies show that due to the decline in pig prices, the net profit of these companies has generally declined, and some leading breeding companies have fallen into huge losses.

Li Guoxiang, a researcher at the Institute of Rural Development of the Chinese Academy of Social Sciences, candidly stated in an interview with the China News Agency's Guoshi Express that the current low pork prices have been ongoing for a considerable period of time, and the pig farming industry is facing significant difficulties. Although the regulatory policies introduced by the country have achieved certain results, the entire industry is still in a loss making state.

In Li Guoxiang's view, the losses in the pig farming industry have affected the stability of labor force income within the industry. In the case of losses, enterprises need to desperately save costs, and labor faces wage cuts and reduced benefits, which inevitably leads to talent mobility. In order to stabilize the workforce, enterprises have no choice but to take measures to restrict job hopping. However, this approach ignored the positive impact of reasonable talent mobility on enterprises before its formation, and violated national laws and public management order.

The interview with the State Administration for Market Regulation has also put forward further requirements for the four companies: the four companies should attach great importance to the problems existing in the Non poaching Convention, effectively enhance their sense of responsibility, and adhere to lawful and compliant operations.

One is to immediately take effective measures, actively carry out rectification, eliminate the harmful consequences of behavior, and regulate one's own business behavior.

The second is to deeply learn from the lessons learned, compare the Anti Monopoly Law and supporting regulations to identify anti monopoly compliance risks, and conduct comprehensive self inspection and self correction.

The third is to strengthen compliance management, improve compliance system construction, and effectively enhance anti monopoly compliance awareness and capabilities.

How can pig farming companies retain talent?

An industry insider revealed to China News Service that in recent years, there has been a fierce competition for talent in the pig farming industry. Excellent talents with both technical and management skills are scarce, becoming the focus of competition among major companies, with monthly salaries even reaching over 100000 yuan. But the act of digging at each other's feet directly leads to problems such as rising labor costs, which brings a huge burden to enterprises.

How can pig farming enterprises overcome difficulties and retain industry talents in a reasonable and legal manner? Li Guoxiang believes that various measures should be taken to stabilize the development of enterprises and the talent pool, while reasonably guiding talent flow and reasonable competition.

In his view, enterprises should take the lead in stabilizing production capacity and saving costs. In terms of talent, emphasis should be placed on ensuring the wages of basic employees, moderately reducing high paying wages, and optimizing the salary structure. In addition to economic incentives, ideological work should also be strengthened to enable employees to timely understand the cyclical fluctuations of the pork industry and make appropriate equity allocations to jointly bear the difficulties of the downturn.

Li Guoxiang predicts that pork prices are expected to decline in the near future, especially during the Liqiu and National Day periods, where pork consumption demand is expected to increase, driving pork prices back to a reasonable level and ensuring stable income for pig enterprise employees.