The Price Control and Anti-Profiteering Act 2018 makes it an offence to profiteer. 'Profiteering' is defined as making an unreasonably high profit, which is measured by a mechanism prescribed in the Price Control and Anti Profiteering Regulations (PCAPR). The first PCAPR came into effect on 1 January 2015, and was replaced by the PCAPR 2016. The current iteration of the PCAPR (PCAPR 2018) came into force on 6 June 2018 and applies to all goods and services sold in Malaysia.
The PCAPR does not make it an offence to increase prices, but it is an offence to increase the net profit margin of goods or services beyond a certain level. That level is computed with reference to the movement of the net profit margin of the product over the past 3 years, as determined by a prescribed formula. There are exceptions to this formula to take into account declining margins, new products and loss leaders, amongst other scenarios.
There is no statutory reporting requirements under the PCAPA, however the Ministry of Domestic Trade and Consumer Affairs (MDTCA) does have the power to carry out inspections and require that pricing information is produced. Where businesses are found to be profiteering, fines for a first offence can reach RM500,000.
As a matter of good governance, businesses should ensure that their pricing is compliant with the PCAPA and that any discrepancies can be explained to the MDTCA if a request for information is received.
Below are the main services we provide in respect of PCAPA. We also offer bespoke services, so if these do not meet your needs, please contact us for further discussion.