Philippine competition body eyeing P2.4-B fine versus 12 onion traders
THE PHILIPPINE Competition Commission (PCC) has recommended a P2.4-billion fine for anti-competitive behavior against 12 importers that allegedly controlled more than half of the country’s onion imports at the height of the onion crisis more than a year ago, the presidential palace said on Sunday.
The importers violated the Philippine Competition Act by sharing with each other sanitary and phytosanitary import clearances issued by the Department of Agriculture-Bureau of Plant Industry, it said in a statement, citing a probe by the commission.
“By agreeing to allocate [import clearances] and divide among themselves the actual volume of imports, respondents effectively controlled more than 50% of the volume of onions imported into the Philippines,” it said. This is illegal because it lessened market competition, it added.
Onion prices hit as high as P700 a kilo between the latter part of 2022 and the early months of 2023. The farming sector had blamed the Agriculture department for failing to make accurate supply estimates and resisting imports. Agriculture officials also suspected internal price manipulations of skyrocketing onion prices.
The palace said the traders also colluded to lessen competition in the market. “Evidence showed that respondents, despite being competitors, shared, exchanged and discussed sensitive business information such as price, suppliers, customers, volume, shipping, distribution and storage.”
The importers and traders avoided competing with each other and failed to independently decide on their policies and “substituted the risk of competition with cooperation,” the palace said, citing the PCC findings.
President Ferdinand R. Marcos, Jr. in his state of the nation address before Congress in July last year ordered the commission and other agencies to investigate the onion crisis and file charges against smugglers, hoarders and those engaged in anti-competitive practices.
The Department of Agriculture in January halted onion imports until May to prevent a free fall in retail prices due to a supply gut. It later extended the ban until July 31 amid stable supply.
The agency last month said it would further extend the ban.
Red onions cost P110.47 a kilo while the white variety costs P108.88 a kilo, according to the Agriculture department’s price monitoring bulletin from Aug. 12-17.
As of July 5, the country had 152,839 metric tons (MT) of red onions, 10,601.42 MT of yellow onions and 63 MT of shallots, according to the Agriculture department.
In the first quarter, onion production was about 201,000 MT, according to the Philippine Statistics Authority, up 36.8% from a year earlier. The DA attributed the production gains to a 40% increase in the land planted with onion.
Agriculture Assistant Secretary and spokesman Arnel V. de Mesa last month said the agency was considering extending the freeze on onion imports to shield domestic producers from price declines just as they are achieving production gains.
The volume was sufficient to meet the demand for about eight months, or until February.
He also said they might opt to import only yellow onions due to the lower inventories of “about 2.5 to three months.”
A bill that seeks to amend the country’s Anti-Agricultural Smuggling Act/Anti-Agricultural Economic Sabotage Act is among the priorities of the Legislative-Executive Development Advisory Council. — KATA
