Thu, Mar 27, 2014 - Page 13 News List

FTC fines meat industry group over price-fixing

By Camaron Kao  /  Staff reporter, with CNA

The Fair Trade Commission (FTC) yesterday fined the Pingtung County Chamber of Commerce Meat Association NT$300,000 for price-fixing, saying the group encouraged its members not to purchase pork from the county’s wholesale market on Jan. 26, causing the market to close that day.

On Jan. 25, about 50 members of the association reached an agreement to boycott the market the following day after wholesalers said they could only provide 1,789 head for sale — less than the 2,000 that the association was asking for, commission member Wu Cheng-wuh (吳成物) told reporters.

The association accounts for about 70 to 80 percent of meat purchases on the market, the commission said.

Wu said the association’s action violated Article 19 Section 4 of the Fair Trade Act (公平交易法), which prohibits any enterprise from forcing another enterprise “to take part in a concerted action by coercion, inducement with interest, or other improper means.”

“The closure of the market affected hog farmers, meat merchants, the market and consumers,” Wu said, citing a statement from the Council of Agriculture.

According to data compiled by the council, the association’s boycott caused pork inventories to rise from 1,635 head on Jan. 25 to 2,786 on Jan. 27 and 2,923 on Jan. 28.

PRICE FLUCTUATIONS

Because of the increased supply, the wholesale price of pork in the county dropped to NT$67.03 per kilogram on Jan. 27 and NT$67.27 per kilogram on Jan. 28, from NT$69.21 per kilogram on Jan. 25, data showed.

However, Wu said the commission could not ascertain whether it was the association’s action that cause the retail price of pork to fluctuate.

The fine was the first ruling by the commission after it started cooperating with the council to investigate whether local pork prices were manipulated by meat suppliers.

The local price of pork soared to NT$83.6 per kilogram on March 4, from an average of NT$75 per kilogram, the council said.

Wu said the commission would complete its investigation of local frozen meat companies by the end of next month.

Chamber of Commerce Meat Association of the ROC secretary-general Yuan Jen-chi (袁仁琦) said the association would appeal the ruling.

“We were trying to help local consumers push down pork prices by boycotting the market,” Yuan said.

NEGOTIATIONS

Yuan said meat merchants should be given more power to negotiate prices and the amount of pork sold on the wholesale market, instead of passively accepting what the market offers.

It is not reasonable to fine the association, because boycotting the market hurt both the market and the association’s members, he said.

The association does not have the money to pay the fine because it does not have a steady source of income, he said, adding that it could not even collect fees from all its members.

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