In a landmark achievement of the Philippine Competition Commission (PCC), the Enforcement Office of the anti-trust body has charged 12 vegetable traders with market allocation and anti- competitive exchange of business information in violation of the Philippine Competition Act (PCA).
Christian Delos Santos, director of the EO, in a press conference in Quezon City yesterday said the office recommended a fine of P2.4 billion, the largest by far, against the following: Philippine Vieva Group of Companies, Inc., P113.231 million; Tian Long Corp., La Reina Fresh Vegetables and Young Indoor Plants, Inc., Yom Trading Corp.
Vegetable Importers, Exporters & Vendors Association of the Philippines (Vieva Phils.) Inc., Golden Shine International Freight Forwarders Corp., Mark Castro Ocampo and Nancy Callanta Rosal, each fined with P330 million; Lilia M. Cruz, Eric Pabilona and Renato V. Francisco, Jr., each fined P773.231 million and; Letty Baculando, P443.231 million.
Secretary Francisco Tiu Laurel in a statement said in addition to the fines and legal charges, the Department of Agriculture (DA) will explore the possibility of blacklisting these unscrupulous traders and potentially withdrawing the accreditation of cold storage facilities whose owners were complicit in this scheme.
Delos Santos said the Statement of Objection (SO) was filed on July 9, 2024 before the Commission after a series of investigations on the activities of the companies covering 2019 to 2023, including the first ever dawn raid conducted in September 2023 that made for a stronger case against the 12.
Delos Santos said the Enforcement Office found the 12 in violation of Section 14 B2 or market allocation practices and Section 14 C of the PCA. Section 14 violations are also called cartels for those businesses conniving to manipulate the market to their advantage.
Delos Santos said the investigation by the Enforcement Office revealed respondents agreed to allocate the supply of imported onions in the Philippines by assigning amongst themselves the sanitary and phytosanitary import clearances (SPICs) , issued by the DA and the Bureau of Plant Industry and the distribution of volume of onions allowed for importation.
The Enforcement Office found the 12 to have colluded to lessen competition by exchanging sensitive business information such as price, suppliers, customers, volume, shipping, distribution, and storage.
“By agreeing to allocate SPSICs, and divide among themselves the actual volume of imports, respondents effectively controlled more than 50 percent of the volume of onions imported into the Philippines. These actions substantially reduced competition, leading to distorted supply and artificial price increases, thereby harming consumers,” he said.
Under the PCA, entities found to have engaged in anti-competitive agreements may be fined at least P110 million. However, if the violation involves a basic necessity or prime commodity, such as onions, the fine may be tripled.
“As a prime commodity we made an effort to compute and recommend the fine commensurate the harm it Delos Santos said.
Delos Santos also expressed hope this case, with the size of recommended fines, would be a deterrent for other industries or companies which engage in similar activities.
Upon receipt of the SO, the Commission will hear the case in the exercise of its power as a quasi-judicial agency.
Tiu Laurel said in a statement the PCC’s move “ should be a sign to all smugglers and unscrupulous traders that we will go after all of them.”
Tiu Laurel expressed dismay at the traders’ actions which the government entrusted with importation permits to ensure stable supply of onions.
“We can’t allow a few individuals, driven by an insatiable lust for money, to exploit our farmers and consumers or, worse, sabotage our economy,” Tiu Laurel said.
