Under the Price Control and Anti-Profiteering Act 2011 (Act 723), it is an offence to make an unreasonably high profit when selling goods or services. The 2018 mechanism regulations compare a trader's current margin or markup percentage against the percentage at the start of the financial or calendar year at the same premises, not against competitors. Since 2018, the act covers all goods and services, and KPDN enforces it through operations such as Op Catut (anti-profiteering across the entire supply chain) and Ops Kesan (inspections of the impact of policy changes such as subsidies).
- Section 14 makes excessive profit a criminal offence, not merely a consumer issue.
- Profit is assessed at the same premises against the trader's base year, not against other shops.
- Individuals can be fined up to RM100,000 and/or 3 years' imprisonment for a first offence; companies up to RM500,000.
- Since 2018, the act covers all goods and services, not just a limited list.
Who this applies to: Traders, producers, wholesalers and retailers in Malaysia, as well as consumers who want to understand their rights regarding price increases.
On this page
Raising prices because costs went up is one thing. Raising prices merely to rake in a bigger profit than last year — that can land you in court in Malaysia.
This is the heart of the Price Control and Anti-Profiteering Act 2011 (Act 723). Many assume this law is only about “controlled” goods like sugar or chicken. In reality it is far broader: since 2018, the act covers all goods and services.
What does “excessive profit” mean?
The core offence lies in Section 14: it is unlawful for any person to make an unreasonably high profit by selling or supplying any goods or services.
The key point is that “excessive” does not mean “expensive”. Under the act’s framework, profit is deemed excessive when a trader’s margin or markup percentage exceeds the percentage at the start of the financial or calendar year. In other words, the measure is your profit percentage today compared with the starting point of your own year.
How KPDN calculates it, and what is not compared
The most important thing for traders to understand: KPDN assesses the price and cost structure at your own premises, not by comparing your shop with the competitor across the street. A shop in an upscale area and a stall in a small town are each assessed against their respective base years.
The 2018 mechanism regulations introduced a formula that takes into account, among other things:
| Factor | Example |
|---|---|
| Imposition of taxes | Changes in the SST rate |
| Supplier costs | Raw material prices, import costs |
| Supply and demand | Seasonal supply shortages |
| Geographical / market factors | Logistics costs to remote areas |
| Other relevant matters | Conditions specific to the product market |
The bottom line: if your costs rise and you raise prices proportionally, your percentage margin stays the same — and you are safe. Problems arise when that percentage margin widens beyond your base year.
What are the penalties?
This is not merely a warning. The fines can be steep:
- Individuals: up to RM100,000 and/or 3 years’ imprisonment for a first offence; up to RM250,000 and/or 5 years for a subsequent offence.
- Corporate bodies (companies): up to RM500,000 for a first offence; up to RM1 million for a subsequent offence.
Op Catut and Ops Kesan: two different operations
KPDN does not just wait for complaints — it conducts periodic enforcement operations. Two that are often mentioned are Op Catut and Ops Kesan, but the two are not the same thing.
Op Catut is an anti-profiteering operation that inspects the entire supply chain — from producers, importers and suppliers to wholesalers and retailers. For example, under Ops Catut 2023, KPDN issued 1,149 notices to obtain information on the prices and costs of goods between 1 January and 30 June 2023.
Ops Kesan, on the other hand, focuses on the impact of policy changes on prices — for instance after subsidy adjustments or public service remuneration reforms. According to a report in April 2026, under Ops Kesan 4.0 and 5.0, the authorities opened 1,443 investigation papers related to anti-profiteering inspections and issued RM142,200 in compounds.
KPDN also introduced a digital Anti-Profiteering Calculator to help traders calculate a lawful margin and to allow consumers to check price transparency.
What’s next
If you are a trader, keep records of your costs and prices at the start of each financial year — that is the base year that will be used to assess you. If you are a consumer who suspects profiteering, a complaint can be made to KPDN. For more context on the taxes that affect prices, see our related article on SST.
Is raising prices illegal?
Not necessarily. Traders are allowed to raise prices if it is in line with rising costs, as long as the current margin or markup percentage does not exceed the percentage at the start of their financial or calendar year.
How does KPDN determine excessive profit?
KPDN compares the price and cost structure at the trader's own premises against its base year, taking into account factors such as taxes, supplier costs, supply and demand conditions, and geographical factors. It is not compared against other premises.
What are the penalties for profiteering?
For individuals, a fine of up to RM100,000 and/or imprisonment of up to 3 years for a first offence, and up to RM250,000 and/or 5 years for a subsequent offence. For corporate bodies, a fine of up to RM500,000, and up to RM1 million for a subsequent offence.
The following are deliberately unstated or described only qualitatively until confirmed by a subject-matter expert:
- Sahkan petikan tepat Seksyen 14(1) (kesalahan) dan seksyen penalti (dilaporkan Seksyen 18) terhadap teks rasmi Akta 723 atau laman FAQ KPDN — laman KPDN tidak dapat diambil secara automatik ketika semakan ini.
- Sahkan butiran mekanisme 2018 (margin/markup berbanding awal tahun kewangan atau kalendar; senarai faktor) terhadap Peraturan Mekanisme 2018 yang rasmi; sesetengah sumber KPDN merujuk kenaikan peratusan dalam beberapa tahun terdahulu, jadi tempoh asas sebenar perlu disahkan.
- Sahkan angka penguatkuasaan terkini: notis Ops Catut 2023 (1,149; 1 Jan–30 Jun 2023) dan Ops Kesan 4.0/5.0 (1,443 kertas siasatan; RM142,200 kompaun, dilaporkan April 2026) mungkin telah dikemas kini oleh operasi lebih baharu (cth. Ops Kesan 6.0).
- Sahkan sama ada Ops Catut dan Ops Kesan masih menggunakan penomboran/versi ini pada tarikh penerbitan.
Sources
- My Say: Key rules for businesses to know about the law on profiteering — The Edge Malaysia
- Ops Catut 2023: KPDN Issues 1,149 Notices — Bernama
- KPDN records enforcement gains as govt tightens control over subsidy leakages and price stability — The Vibes
Change history
| Version | Date | Change | By |
|---|---|---|---|
| 01.00 | 8 Aug 2026 | Approved and published. | — |