ALLEGED CARTEL. Philippine Competition Commission (PCC) Enforcement Office Director Christian Loren De Los Santos briefs members of the media in a press conference at the PCC headquarters in Quezon City on Thursday (Sept. 5, 2024) on the case of an alleged onion cartel by 12 traders and importers that contributed to the price surge of onion in 2022. The Enforcement Office recommended a PHP2.4 billion fine for the involved parties. (PNA photo by Kris M. Crismundo)
MANILA – The Philippine Competition Commission (PCC) on Thursday named the 12 vegetable traders and importers behind an alleged cartel relating to the onion crisis in 2022.
In a press conference at the PCC headquarters in Quezon City, PCC Enforcement Office Director Christian Loren De Los Santos said Philippine Vieva Group of Companies, Inc.; Tian Long Corp.; La Reina Fresh Vegetables & Young Indoor Plants, Inc.; Yom Trading Corp.; Vegetable Importers, Exporters & Vendors Association of the Philippines; and Golden Shine International Freight Forwarders Corp. have been charged for their cartel-like behavior.
The Enforcement Office also named Lilia Cruz, Eric Pabilona, Renato Francisco Jr., and Letty Baculando who are executives in these companies, as well as sole proprietors Mark Castro Ocampo and Nancy Callanta Rosal for being involved in anti-competitive practice in onion trading.
“In the Statement of Objections (SO) that we filed, the respondents were charged with market allocation and anti-competitive exchange of business information in violation of Section 14 of the PCA (Philippine Competition Act),” De Los Santos said.
He said violations of Section 14 of the PCA are also called cartels, or those businesses conniving to manipulate the market to their advantage that causes significant harm to consumers by engaging in coordinated anti-competitive conduct, such as price-fixing, bid-rigging, output restriction, and market allocation.
The SO was filed with the PCC on July 9 and summons were sent to the respondents on July 16.
The respondents were given 60 days to answer the summons.
De Los Santos said the case is a landmark for the Enforcement Office as this is the first that the PCC used the dawn raid as its investigative tool.
He said the Enforcement Office conducted the dawn raid in September 2023.
Through the raid, the Enforcement Office was able to enter the premises of the respondents, and look for documents that could become evidence to “make up for a better case.”
“It's a landmark because not all competition agencies, especially in the ASEAN, have gone to the extent of this. So, for us, it's an accomplishment,” he said.
‘Millions earned’
De Los Santos said the evidence they got from the raid showed “that the cartel earned millions from the collusive agreement.”
“Documents obtained also showed that the anti-competitive conduct among the respondents existed as early as 2019 and was implemented by the officers of the involved entities,” he added.
The Enforcement Office has recommended fining the charged entities PHP2.42 billion, with fines ranging from PHP113.2 million to PHP330 million.
De Los Santos said the anti-competitive practice of the charged traders and importers contributed to the skyrocketing onion prices in the latter part of 2022.
He said the charged entities were able to control more than 50 percent of the volume of onions between 2019 and 2022.
“I can't say that they are really responsible, but they contributed because all the cartels, when they are there, the effect is that the price increases or the volume that goes around the market decreases. So that is really the harm that cartels cause,” he said.
Banned from transacting with BPI
Meanwhile, the 12 onion importers and traders, among them six individuals, allegedly involved in an onion cartel will no longer be able to transact with the Bureau of Plant Industry (BPI), the Department of Agriculture (DA) said.
“We support itong ginagawa ng (this activity of the) PCC and right now all these ay hindi na makaka-transact sa (they can no longer transact with the) BPI as per information we got from Director Glenn (Panganiban) of Bureau of Plant Industry,” DA Assistant Secretary Arnel De Mesa said in an interview.
He noted that although some of the involved traders still have valid registrations beyond 2024, they would not be able to join BPI’s transactions, including the upcoming onion importation.
The DA earlier approved the importation of 16,000 metric tons (MT) of yellow onion to maintain stable prices even until the holiday season.
According to PCC, the involved traders were able to import at least 76,555 MT of onions, which is equivalent to 28,916 MT of red onions and 47,639 MT of white onions for the 2020-2021 onion importation.
In the last quarter of 2022, the price per kg. of onions surged to PHP600 to PHP700 across the country.
De Mesa said the PCC’s move might help prevent spiking market prices as the alleged “market allocation” might eventually lead to “control of volume and prices” in local markets.
“Kung meron silang ginagawa na unfair trade previously, so maiiwasan natin iyong collusion. Kasi kung may collusion kasi ang problema noon, iyong presyo kahit may importation hindi bababa (If they engaged in unfair trade previously, collusion could be prevented. With collusion, prices will not drop despite importation),” he said.
He assured continuous support and collaboration with the PCC and other agencies to intensify the crackdown against unscrupulous traders.
Besides intensified inter-agency collaboration, De Mesa said, the DA’s regulatory bodies would study how to improve its measures in the issuance of sanitary and phytosanitary import clearance to avoid similar issues.
These include the BPI for plant products, the Bureau of Fisheries and Aquatic Resources for fish products, and the Bureau of Animal Industry for animal products.
Meanwhile, Agriculture Secretary Francisco Tiu Laurel Jr. vowed to go after all unscrupulous traders.
“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 in a statement.
"In addition to the fines and legal charges, the Department of Agriculture 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," he added. (PNA)
