PCC files charges vs. 'Onion Cartel'

The Enforcement Office of the Philippine Competition Commission (PCC) has filed charges against 12 importers it dubbed the "onion cartel" for supposed collusion. 

The PCC said that the group controlled 50% of the market when prices hit over P700 per kilogram in 2022.

Enforcement Office director Atty. Christian Loren Delos Santos on Thursday said a Statement of Objections was filed against the importers on July 9, 2024 for violating provisions of the anti-cartel provision of the Philippine Competition Act (PCA).

Respondents include seven firms and their officers for behaving like a cartel through market allocating the supply of imported onions by assigning the Sanitary and Phytosanitary Import Clearances (SPSICs) issued by the Department of Agriculture-Bureau of Plant Industry (DA-BPI) among themselves, and allegedly dividing the volume of imports within the group.

They were also found to have colluded to lessen competition by exchanging sensitive business information such as price, suppliers, customers, volume, shipping, distribution, and storage, dating as far back as 2019 until 2023.

Imported onions

The respondents were found to have imported 28,916 metric tons of red onions and 47,639 metric tons of yellow onions for the period 2020 to 2021.

“By agreeing to allocate the SPSICs and divide among themselves the actual volume of imports, the respondents effectively controlled more than 50% of the volume of onions imported into the Philippines during the relevant period and this is an anti-competitive agreement,” Enforcement Office director Atty. Christian Loren Delos Santos said in a press conference in Quezon City.

The findings were from a raid conducted in September 2023, the first of its kind conducted under the Rules on Administrative Search and Inspection (RASI) issued by the Supreme Court in 2019.

The PCC said it collected “voluminous documents,” records, and electronic data related to the companies’ trading activities during the raid.

This comes as onion prices hit as high as P720 per kilogram in 2022, when at least P191 million worth of smuggled onions were seized from container vans in several ports.

P2.4 billion fine

The Enforcement Office has recommended a P2.4 billion collective fine for the respondents, which is the biggest yet.

Under the PCA, entities found to have been involved in anti-competitive agreements may be fined at least P110 million. As the case involves onions, classified as a prime commodity, the fines were then tripled to P330 million.

"'Yung basic fine is 30% ng sales, so isipin niyo na lang po kung gaano kataas 'yung sales na nakuha nila kung ganito po 'yung recommended fine natin," Enforce Office assistant director Atty. Genevieve Jusi said.

(The basic fine is 30% of sales, so think how high their sales must have been if this is the recommended fine.)

Asked if the Enforcement Office will recommend that the DA bar the respondents from importing, its executive director Kenneth Tanate said this will have to depend on the PCC ruling on the matter.

“‘Yung kaso kasi na finile sa kanila has yet to be decided by the Commission, so siguro kung may decision na, parang i-consider ng DA ‘yung case natin against these importers. As of now, we cannot say na pagbawalan na sila sumali sa importation,” he said in the same press conference.

(The case that was filed against them has yet to be decided by the Commission, so maybe if a decision is made, the DA can consider the case against these importers. As of now, we cannot say that they should be banned from importation.) —VAL, GMA Integrated News