The Fair Trade Commission find the nation’s four major convenience store chains were for price-fixing and raising coffee prices by NT$5 (US$0.17) per cup, according to a commission ruling yesterday.
The largest, President Chain Store Co (統一超商), which runs 7-Eleven stores, was fined NT$16 million, with Taiwan FamilyMart Co (全家便利超商), Hi-Life International Co (萊爾富) and OK Mart Co (來來超商) being fined NT$2.5 million, NT$1 million and NT$500,000 respectively.
An investigation by the commission in September revealed that while the convenience stores had raised their prices for different reasons, they had unanimously increased the price of a cup of coffee by the same amount. The commission said this was an act of price-fixing and as such it violated the Fair Trade Act (公平交易法).
Fair Trade Commissioner Sun Lih-chyun (孫立群) said that although the companies cited increased milk prices as the main reason for their decision, the commission found that each chain used milk in very different quantities, yet the price increase was uniform.
Moreover, commission officials said, the chains usually act independently of each other, yet in the first week of last month, all four companies raised their prices. The policies were passed in haste, in some cases only with the agreement of a few managers, they said.
The commission said this meant the policy was carried out simultaneously.
Following the ruling, President Chain Store officials denied price-fixing, saying Taiwan’s coffee market is very competitive and there is no need to engage in price-fixing or give competitors insight into important policies, as it would affect sales. The company plans to appeal the decision.
Officials from 7-Eleven added that the company has been in the coffee industry for seven years and has never implemented a uniform price increase. Recent price changes reflect differences in all-round costs, which are not the same as competitors that may have only been in the coffee business for a few years.
FamilyMart officials made similar claims, saying increases in the cost of electricity, salaries and new equipment were the cause of the price increase. The company also plans to appeal.
Sun said the commission also looked into the business practices of coffee shops, such as Starbucks. Nothing irregular was found in the franchise’s pricing policy.
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