PCC to look into alleged cold storage cartel in onion industry
MANILA, Philippines – The country’s antitrust body said Friday it will look into alleged cold storage cartel in the onion industry, which has allegedly forced onion farmers to cut prices by half.
The Philippine Competition Commission (PCC) said in a statement that it will investigate the competition concerns after being prompted by the Department of Agriculture (DA).
The issue revolves around four major trading firms in Nueva Ecija, which DA Secretary Emmanuel Piñol said had closed down their cold storage facilities in time for the harvest season to force farmers to sell their produce at low prices.
PCC stressed the importance of these facilities, which prolong the shelf life of onions after harvest season. Proper storage, PCC said, allows onions to be sold 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,” it said.
“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,” it added.
The competition watchdog, however, clarified that DA could still act on the issue the best way it sees fit.
“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,” PCC said.
So far, DA has temporarily suspended the importation of bulb onions while waiting for the results of probes by PCC and the National Bureau of Investigation.
The DA chief also said the agency would give P200 million in working capital to cooperatives to enable them to buy their members’ produce “to protect them from price manipulation by traders.”
In light of recent events, PCC mentioned the prospect of a memorandum of agreement with DA, in order to harmonize their objectives.
“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,” PCC said.
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