Taiwan Sugar Corporation

Case:

Key Words:

monopoly, exclusive sales, refuse to trade, granulated sugar

Reference:

Fair Trade Commission Decision of November 2, 2006 (the 782nd Commissioners' Meeting); Letter (95) Kung Er Tzu No. 0950009565 issued on November 3, 2006

Industry:

Sugar Manufacturing (0893)

Relevant Laws:

Article 10(iv) of the Fair Trade Law

Summary:

1. This case originated from I-Mei Foods Co., Ltd.'s (hereinafter called the "Complainant") complaint stating that after granulated sugar was open for importation, Taiwan Sugar Corporation (hereinafter called "Taiwan Sugar") had monopolized the market; and that Taiwan Sugar might have violated the Fair Trade Law by refusing to trade with the Complainant and giving no response to the purchase orders of granulated sugar placed by the Complainant as punishment after the Complainant planned on importing granulated sugar for sale. Tainan Sugar Association also submitted a letter to the FTC during the investigation to complain that Taiwan Sugar enacted unreasonable sugar selling rules.
2. Findings of FTC after investigation: In 2005, the total domestic consumption of brown sugar was about 145 thousand tons, in which only 48,536 tons was manufactured by Taiwan Sugar who had a market share of only 33.5%. Currently, there are other companies importing and selling brown sugar products, such as Vedan. The Complainant also claimed that it could manufacture brown sugar. Therefore, since the liberation of domestic granulated sugar market on February 7, 2005, Taiwan Sugar has lost its monopolistic position in the market. Furthermore, because the production season of domestic sugarcane is from the end of December to the beginning of March next year, Taiwan Sugar's manufacturing period of brown sugar is also from December 20 to March 10 next year. Taiwan Sugar stated that when the Complainant requested for brown sugar on November 25, 2005, Taiwan Sugar had sold out superior brown sugar and had only brown sugar which was produced in the previous year and contained higher moisture. Unless voluntarily accepted by the consumer, Taiwan Sugar stated that it would normally refuse to sell such inferior sugar to protect its reputation. Taiwan Sugar stated that it already phoned the Complainant and explained said situation. Additionally, Taiwan Sugar stated that it never enacted any granulated sugar selling rules. Taiwan Sugar further stated that when the international sugar price went high and there was a panic buying of sugar in early 2006, in order to fully satisfy the demand, Taiwan Sugar immediately imported 48,500 tons of white sugar in March 2006 which is now unmarketable due to oversupply. Up to mid September 2006, Taiwan Sugar had a total stock of 100,000 tons.
3. Grounds for no disposition:
   According to current evidence, it is difficult to find Taiwan Sugar in violation of the Fair Trade Law with regards to its refusing to trade and enactment of unreasonable sugar selling rules.

Appendix:
None

Summarized by Huang, Chung-Chieh; Supervised by Wu, Pi-Ju