THE Philippine Competition Commission (PCC) has turned down the voluntary commitments offered by Universal Robina Corp. (URC) in relation to its acquisition of the sugar milling and refining assets of Roxas Holdings, Inc.’s (RHI) subsidiary Central Azucarera Don Pedro, Inc. (CADPI).
“After careful deliberation and consultation with the affected stakeholders, the Commission decided last Tuesday to reject the voluntary commitments offered by the parties, as these do not sufficiently address the anticompetitive effects arising from the transaction,” PCC Chairman Arsenio M. Balisacan said in a briefing on Friday.
This means the PCC will now proceed to review the merger-to-monopoly transaction between URC and RHI.
The Gokongwei-led URC announced in August it wants to buy the assets of RHI and CADPI, namely all buildings, improvements, machineries and equipment, laboratory equipment, spare parts and transportation equipment and the land in Brgy. Lumbangan, Nasugbu, Batangas where these are located.
The PCC said during the same period that it would have to review the URC-RHI transaction because initial findings show it may affect the local sugar industry.
URC and RHI filed its notification notice to the PCC in July. The competition watchdog flagged from the transaction “substantial lessening of competition in the following markets: (1) provision of sugar cane milling services in the provinces of Batangas, Cavite, Laguna and Quezon; (2) provision of raw sugar refining services; (3) raw sugar; (4) refined sugar; and (5) molasses.”
URC then submitted its set of voluntary commitments to the PCC, where they promised on (1) increasing sugar recovery rates; (2) performing capital upgrades; (3) maintaining trucking allowances; (4) providing planter assistance; (5) sharing ratios; and (6) reporting stakeholder feedback.
PCC Commissioner Amabelle C. Asuncion explained while some of URC’s commitments are acceptable, “in the end, the evaluation of the entire set of commitments did not sufficiently address all the concerns considering that the transaction would result into a monopoly after the transaction.”
But she noted URC may still opt to submit a revised set of voluntary commitments. “That door is not yet completely closed…,” Ms. Asuncion said. — Denise A. Valdez