29 March 2019
PCC Statement on Alleged Cold Storage Cartel in Onion Industry
The Philippine Competition Commission (PCC) confirms the receipt of the request for assistance by the Department of Agriculture (DA) on the alleged cold storage cartel in the onion industry.
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. As such, the antitrust authority reminds firms that the competition law punishes those engaged in cartels with a fine of P100 to P250 million, and imprisonment of up to seven (7) 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. PCC will look at the alleged refusal of storage access to onion farmers in favor of large traders and will also evaluate if there are business agreements that are anticompetitive or enablers of cartelistic behavior.
Specifically, 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. 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.
With this, PCC welcomes the prospect of forging a Memorandum of Agreement with DA to harmonize the objectives of both agencies of fostering fair market competition and promoting agricultural growth. This cooperation 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.
Arsenio M. Balisacan, PhD
Philippine Competition Commission