Uni-President Enterprises Corp (統一企業), Taiwan’s largest food maker, yesterday said it did not rule out future cooperation with rival Wei Lih Food Co (維力食品), despite the Fair Trade Commission (FTC)’s rejection on Thursday of its planto take a stake of more than 50 percent in Wei Lih.
“We are working toward that direction [of future cooperation], with related negotiations currently ongoing,” said a Uni-President official who asked to remain anonymous.
The possible partnerships may include overseas expansion, but “all future projects will abide by Taiwan’s regulations,” the official said, adding that the company is unlikely to appeal the FTC’s decision.
On Thursday, the FTC rejected the company’s effort to raise its stake in its local rival, citing concerns over market monopoly and possible price-fixing. In a filing with the Taiwan Stock Exchange yesterday, Uni-President said “it didn’t agree with the FTC verdict, but respected the outcome.”
The filing said Uni-President’s plans to increase its holdings was intended to pave the way for expansion into international markets.
Uni-President took a 31.84 percent stake in Wei Lih in February 2007 for NT$891 million (US$28 million), becoming the second-largest shareholder.
In 2008, a plan to buy another 17.91 percent stake in Wei Lih for NT$250 million was rejected by the FTC over similar concerns.
However, when Wei Lih’s board was reshuffled in October 2008, Uni-President secured three seats and one supervisory seat. Uni-President president Alex Lo (羅智先) has since become Wei Lih’s chairman.
Uni-President reapplied this year to secure more than 50 percent of Wei Lih, by claiming that despite controlling nearly 70 percent of the local instant noodles market, the two companies do not form a monopoly in other sectors such as frozen dumplings, biscuits or lunch boxes.
The FTC again rejected the move on Thursday, citing the same monopolistic concerns, particularly in the instant noodles market.