PCC looking into alleged cartel controlling garlic

THE Philippine Competition Commission (PCC) has launched its 90-day preliminary investigation into the alleged cartel controlling the garlic industry a day before its two-year transitory period lapsed yesterday.

“Triggered by the letter from Senator Villar, the PCC has decided to launch a preliminary inquiry into the garlic industry. We are mindful of the fact that this issue is an important public concern,” said PCC Chairman Arsenio M. Balisacan during a news conference yesterday in Ortigas district.

The preliminary inquiry, which started on Monday, is a 90-day fact-finding period to see whether the industry qualifies for a full administrative investigation, with the PCC looking into the impact on the industry and the consumer.

“Once we are able to identify these things, then we might proceed to a more formal investigation where we are looking at possible areas where we see possible violations,” said PCC’s Orlando P. Polinar, a lawyer and director of the Competition Enforcement Off ice.

The formal or the full administrative investigation is conducted to ascertain whether there is sufficient basis to charge an entity with anti-competitive practices under the Philippine Competition Act (PCA), and related laws. Violations are subject to fines of up to P100 million for a first offense and up to P250 million for a second offense, and imprisonment of up to seven years.

Senator Cynthia A. Villar, chair of the agriculture and food committee, called on the competition body last month to look into cartel behavior in the garlic industry amid large price swings, which she first raised in 2014, even before the PCC was established. Philippine Statistics Authority data show that garlic prices hit P200 a kilo during the last week of April until May, from just P160 in March.

The PCC added that it is also preparing an issue paper covering the logistics and transport industry before initiating a preliminary investigation.

“We are commissioning the issue paper to determine whether possible anti-competitive practices are happening. For the transport sector, we’re looking at two sub-sectors. One is ferrying passengers and the other subsector is the ferrying of goods. Its an important sub- sector that would promote inclusive growth,” Commissioner Stella Luz A. Quimbo said.

This comes on top of its current three full administrative investigations on the power, cement, and another industry that the PCC has declined to identify.

For mergers and acquisitions ( M& As) — where the PCC requires firms to notify the body for M&A deals worth P1 billion and up — the agency has received 114 merger notifications with a total value of P1.95 trillion, with the majority from the manufacturing, financial, electricity, and transportation sectors.

Of the 114, 32 have been reviewed.

The Japan Tobacco International (JTI) Philippines — Mighty Corp. acquisition is still in its 30day phase one review as it is currently on the 15-day initial review of documents after the parties submitted notice of the deal.

President Rodrigo R. Duterte ordered the Finance department to accept the record tax settlement deal of P25 billion to accompany the sale of Mighty Corp.’s P45 billion worth assets to JTI Philippines.

The PCC reminded businesses that it will start imposing penalties for violations of the PCA after the transitory period for the act ended yesterday. The PCA was signed into law on Aug. 8, 2015 after almost two decades in the legislative system. “The operations of the PCC and the implementation of the PCA are now, indeed, in full swing. We encourage businesses to comply with all our processes and cooperate with us in our inquiries and investigations,” said Mr. Balisacan. —