THE Philippine Competition Commission (PCC) said it imposed a record fine of P1.76 billion on onion traders found to have operated a cartel that brought prices to as high as P800 per kilo in late 2022.
In a briefing on Thursday, PCC Executive Director Kenneth V. Tanate said the traders had cornered nearly 50% of all approved import clearances for red and yellow onions.
The traders were found “participating in a cartel engaged in an illegal market allocation scheme in the import, cold storage, and distribution of red and yellow (or white) onions.”
The penalties are authorized by Section 14(b)(2) of Republic Act No. 10667 or the Philippine Competition Act (PCA), with the offenses described as “agreeing to divide or share the market, whether by volume of sales or purchases, territory, types of goods or services, buyers or sellers or any other means.”
Individuals involved in cartel activity may also face criminal liability under Section 30 of the PCA for violating Section 14(a) and (b), which impose prison terms and fines upon prosecution by the Department of Justice’s Office for Competition.
The onion cartel members were identified as Golden Shine International Freight Forwarders Corp., Tian Long Corp., La Reina Fresh Vegetables & Young Indoor Plants, Inc., Yom Trading Corp., and sole proprietors Mark Castro Ocampo of Vegefru Producing Store, and Nancy Callanta Rosal of Rosal Fruit and Vegetable Trading.
The P1.76-billion fine was the biggest imposed by the PCC so far, Mr. Tanate said.
“Since onions are classified as prime commodities, the PCA automatically trebles all basic fines,” he added.
The PCC added that the importers and their facilitator were ordered to pay the maximum fine of P330 million each. Tian Long and one of its officers were ordered to pay P118.33 million.
Evidence pointing to the cartel behavior was seized during a court-ordered raid on a Golden Shine facility on Sept. 6, 2023.
According to the PCC’s investigation, the cartel controlled a large share of onion sanitary and phytosanitary import clearances and allocated quotas across members of the cartel.
“By accumulating permits across separate corporate entities, the respondents collectively controlled nearly 50% of all import clearances for red and yellow (or white) onions in 2020 and 2021,” Mr. Tanate said.
The shipments were then routed to cold storage facilities managed by Tian Long, which distributed the produce nationwide.
Mr. Tanate noted that the cartel operated facilities in Bulacan, Iloilo City, Cebu City, Cagayan de Oro, and Davao City.
The PCC ruling was issued on Oct. 1, with the accused given 15 days to pay the fines or appeal.
It added that fines were calculated using actual import clearance volumes and wholesale prices reported by the Philippine Statistics Authority, because the importers submitted audited financial statements that were found to be grossly understated.
The regulator also dismissed charges against Philippine Vieva Group of Companies, Inc. and Vegetable Importers, Exporters & Vendors Association of the Philippines, Inc. due to insufficient evidence. — Beatriz Marie D. Cruz