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The National Law Center is a non-profit 501(c)(3) Research and Educational Corporation. © Copyright, 1996
Baker & McKenzie
Eugenio Hernandez-Breton (Caracas)
(58-2)953-0833
Decree No. 985 (Official Gazette No. 35,858 of 13 December 1995), requires importers, manufacturers and producers to mark a maximum price ("P.M.") on food, medicine, personal hygiene products, cleaning products, spare parts for automobiles and home equipment, electrical appliances and other equipment for home use, textbooks, school utensils and uniforms, sport items and sportswear. The P.M. establishes the ceiling for retailers in setting the public sales price or P.V.P. The P.M. is not a sales price because it does not substitute the P.V.P., or the maximum public sales price, P.M.V.P. that is set by the Ministry of Development.
Although the Decree does not expressly so provide, the maximum price applies solely to unregulated goods. For staples, whose P.M.V.P. has been set by the Ministry of Development, the importer, manufacturer, or producer is required to mark the P.M.V.P. only. The maximum price must be established separately by each importer, manufacturer or producer, without collusion with competitors and it must be based on the structure of production or importation costs plus a reasonable profit margin.
The maximum price poses some problems, both legal and commercial. The current Consumer Protection Law does not expressly establish the maximum price concept. Therefore, the Decree is based on Article 5 and other provisions, which empower the National Executive to take measures it deems necessary to avoid undue increases in the prices of goods and services. Additionally, although the maximum price is set separately by each importer and seller, etc., it is clear that free competition among retailers is restricted. Furthermore, the maximum price enables importers, manufacturers, and producers to control the profit margins of each agent in the marketing chain.
Importers, manufacturers and producers have forty-five days from the date of publication of the Decree to comply with the duty to mark maximum prices. Products that had been marked with the P.V.P. prior to December 13, 1995, must be sold at that price. Any person violating the provisions of the Decree, may be subject to fines of between 20 and 2,000 times the minimum daily urban salary.
The information contained in this article should not form the basis of any decision as to a particular course of action; nor should it be relied on as legal advice or regarded as a substitute for detailed advice in individual cases.
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