MANILA -- The Philippine Competition Commission (PCC) on Friday forged a memorandum of agreement (MOA) with the Department of Agriculture (DA) to harmonize their objectives of fostering fair market competition and promoting agricultural growth.
"The PCC confirms the receipt of the request for assistance by the Department of Agriculture on the alleged cold storage cartel in the onion industry," the PCC said in a statement.
"All of PCC’s actions are directed by its mandate to promote fair market competition, advance consumer welfare, and penalize violators of the Philippine Competition Act," it added.
Agriculture Secretary Emmanuel "Manny" Piñol earlier ordered the suspension of importation of bulb onions, pending the results of the investigation of the PCC and the National Bureau of Investigation on the reported cartel manipulation of the buying price of locally-produced onion.
Piñol said the suspension would prevent the cartel from benefitting from their operations, where they forced the drop in the buying price of local onions by lclosing cold storage facilities to farmers and leasing these out.
Prices of red onion fell from a high of PHP30 per kilo before harvest to only about PHP15.
With bumper harvest of onion now in Central Luzon, Mindoro and Iloilo, he said traders have started their manipulation of the market.
"The practice in the onion industry is for local farmers to store their excess production in cold storage facilities and release this to the market at off-season," he said.
Among the companies targeted for investigation for possible violation of fair competition and economic sabotage are Rivson, Argo, Kasamne and Titan, all based in Nueva Ecija.
Meanwhile, the anti-trust authority reminded firms that the competition law punishes those engaged in cartels with a fine of PHP100 million to PHP250 million, and imprisonment of up to seven years.
"Cold storage facilities form an important part in the value chain to prolong the shelf life of onions after harvest season. Proper storage allows its sale for an extended period or during lean months," it said.
The PCC said it will look into the alleged refusal of storage access to onion farmers in favor of big traders and will also evaluate if there are business agreements that are anticompetitive or enablers of cartelistic behavior.
Specifically, it said, the PCC will examine whether there are competition concerns in the onion industry such as restriction of storage space or price manipulation by cartels, or whether the storage concerns are natural consequences of supply conditions.
"Regulatory measures involving the importation of agricultural products are within DA’s jurisdiction, separate from PCC’s exercise of its mandate," it said.
As such, the PCC said, "the timing of any investigation or advisory from another agency like PCC should not prevent DA from exercising its own judgment in suspending or allowing importation."
It stressed that the MOA is especially important in the face of the changes in the economic landscape of agricultural production and trade.
"Given the crucial importance of food and agriculture in the economy, particularly on the poor, PCC will assert all its powers as provided for in the competition law," it noted. (PNA)
