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Fair Trade Commission fines RT-Mart

RT-Mart (大潤發), the nation's second largest hypermarket chain, was fined NT$1.2 million (US$39,000) for violating Article 24 of the Fair Trade Act (公平交易法), the Fair Trade Commission said in a statement issued yesterday.

Article 24 regulates fair and honest practices in transactions.

The commission said that according to complaints filed by one of RT-Mart's suppliers, the hypermarket operator took advantage of its dominant position in the market to collect a so-called "lowest sponsor fee" through a clause in its contracts with suppliers.

The fee is based on RT-Mart's estimated purchases from suppliers. However, the clause remains binding even if the retailer fails to achieve the estimated goal. Suppliers are also forced to accept this agreement to maintain a business partnership with the operator.

The extra charge is slapped on top of the direct profits suppliers can secure, the statement said.

The commission ruled that the clause is unreasonable as it guarantees that RT-Mart can garner a minimum amount, regardless of any unexpected events that a supplier might face. It also increases operating costs for suppliers and erodes their normal profits.

Retailers are entitled to collect extra charges from suppliers, but such charges must be proportional to the actual purchase amounts, the statement said.
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