The Philippine Competition Commission (PCC) will investigate the alleged cold storage cartel in the onion industry that is forcing onion farmers to sell their produce at lower prices.
PCC’s plan to conduct an investigation is in response to the request of the Department of Agriculture (DA), which had recently temporarily suspended imports of bulb onions pending results of an investigation by the anti-trust body and National Bureau of Investigation (NBI) into the reported operation of a cartel.
“PCC will look at the alleged refusal of storage access to onion farmers in favor of large traders and will also evaluate if there are business agreements that are anticompetitive or enablers of cartelistic behavior,” PCC said.
“Specifically, PCC will examine whether there are competition concerns in the onion industry such as restriction of storage space or price manipulation by cartels, or whether the storage concerns are natural consequences of supply conditions,” it added.
PCC noted that cold storage facilities form an important part of the value chain in prolonging the shelf life of onions after harvest. Proper storage allows the sale of onions for an extended period or during lean months.
The antitrust body, however, noted that the timing of any investigation or advisory from another agency like PCC should not prevent DA from exercising its own judgment on whether to suspend or allow importation.
PCC said it welcomes the prospect of forging a memorandum of agreement with DA to harmonize the objectives of the two agencies in fostering fair market competition and promoting agricultural growth.
“This cooperation is especially important in the face of the changes in the economic landscape of agricultural production and trade. Given the crucial importance of food and agriculture in the economy, particularly on the poor, PCC will assert all its powers as provided for in the competition law,” it said.
Meanwhile, DA in a separate statement said it will provide the Onion Farmers Associations with working capital to buy their members’ produce to protect them from price manipulation by traders, and will source reefer vans to be used as temporary storage facilities for the farmers’ onions.
