Directive No. 070, Price Determination, Setting and Marking

BENSON, PEREZ MATOS, ANTAKLY & WATTS

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Caracas, October 28, 2015

Administrative Directive Nº 070-2015 to Regulate the Determination,

Fixing and Marking of Prices

Administrative Directive N° 070/2015, issued by the Office of the National Superintendent for the Defense of Socio-Economic Rights (SUNDDE after the Spanish acronym) was published in Official Gazette No. 40,775 dated October 27, 2015. The Directive governs the determination, fixing and marking of the prices of goods and services marketed in this country.

The Directive covers two broad aspects: (a) the determination and fixing of prices; and (b) the obligation to mark two price categories.  The most important aspects are as follows:

(a) Determination and setting of prices

Mandatory adoption of the following price categories:

(a.1) The Producer’s or Importer’s Maximum Sale Price (PMVPI after the Spanish acronym). The determination and fixing of the price is up to the producer or importer and this is the highest price in bolivars for marketing the goods for those in charge of selling them to the end user.

 (a.2) The Maximum Sale Price to the Public (PMVP after the Spanish acronym). The determination and fixing of this price is also up to the producer or importer, and it is the highest price in bolivars for the retail marketing of a good or service to the consumer or end user. The PMVP will be the result of adding the PMVPI plus the appropriate intermediation markup for the rest of the members of the marketing chain, with the limitations pertaining to the Maximum Profit Markup and the Maximum Intermediation Markup (IM), which are:

1. The Maximum Profit Markup for importers will be 20% and 30% for domestic producers and service providers.

2. Maximum Intermediation Markup (IM) will be 60%, which applies to all of the members of the distribution or marketing chain, whatever the number of members. The IM aliquot for each member of the chain shall be adapted to the usual practices in the marketing of the good or service in question. The IM is the percent relationship between the PMVPI and the PMVP, and must be calculated for each type of good. Under no circumstance can the distributor’s IM per unit of product be higher than the retailer’s IM.

(a.3) The Fair Price. This is the price determined and fixed by SUNDDE for a type of good or service at which said good or service must be marketed to the consumer or end user.  The Fair Price will be announced in the web site of that agency and can only be marked when the price has been fixed by SUNDDE.

In the same manner, the Directive provides that, for purposes of the determination of the prices mentioned above, the following aspects will be taken into consideration:

    • The cost structure of the good or service
    • The PMVPI [Producer’s or Importer’s Maximum Sale Price]
    • The Maximum Profit Markup
    • The Maximum Intermediation Markup
    • The strategic nature of the good with regard to the satisfaction of the essential rights of the population.

(b) Marking the PMVP and the Fair Price

(b.1) The Directive essentially reproduces the rules contained in Administrative Directive No. 057/2014 issued by SUNDDE with regard to the marking of prices. The new Directive does not revoke the previous one, only those rules that contradict the regulations of the new one.

(b.2) The basic principle that every good or service to be marketed in this country must have its PMVP or Fair Price fixed or marked continues to be in force.

(b.3) The same sequence of preference remains in force for the ways of marking prices: Labeling, Self-adhesive Label and Printed Listing.

(b.4) The provisions as to the size of the label are kept: 5mm and exceptionally 3mm.  The directive does require further detail as to the information that must be contained in the marking.

(b.5) The ban of double price marking and erasures is ratified.

Yours truly,

BENSON, PÉREZ MATOS, ANTAKLY & WATTS

Lubín Chacón G.

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