Approval for the combination of Save & Save Company Limited and Taiwan Sugar Corporation Limited
Chinese Taipei
Case:
Approval for the combination of Save & Save Company Limited and Taiwan Sugar Corporation Limited
Key words:
bulk sales industry, combination, jointly operates or is entrusted to operate
Reference:
Fair Trade Commission Decisions of April 1, 1998 (the 334th Commission Meeting), April 4, 1998 (the 334th-2 Commission Meeting), April 8, 1998 (the 335th Commission Meeting); Decision (87) Kung Chieh Tzu No. 197
Industry:
General Retail Sales Industry (5329)
Relevant Laws:
Summary:
This combination involves enterprises that "frequently operate[s] jointly with another enterprise or is entrusted by another enterprise to operate the latter's business," as provided in Article 6(1)(iv) of the Fair Trade Law. The sales of Save & Save Company Limited (SSCL) and Taiwan Sugar Corporation (Tai Sugar) for the 1996 fiscal year were more than NT$3,252,760,000 and NT$43,906,500,000, respectively. Such sales amount conformed to the standard provided by Article 11(1)(iii) of the Fair Trade Law where "the amount of sales in the preceding fiscal year of an enterprise participating in the combination exceeds the amount publicly announced by the central competent authority." According to Article 7(1) of the Enforcement Rules of the Fair Trade Law, when an enterprise is combining with other enterprises, all of the enterprises participating in the combination must apply to the central competent authority. Therefore, SSCL and Tai Sugar jointly applied for approval of their combination.
Upon investigation of the two enterprises involved in the combination, we found that SSCL's business items included operation of convenient stores and supermarkets, and sales of daily use goods, i.e., a typical wholesale store. In addition to brown sugar, liquid sugar, etc., products and the R&D, manufacturing, processing and sales of related products, Tai Sugar operated supermarkets, convenience stores, retail sales market and trade exhibits. Thus, a portion of the two enterprises' business items overlapped. It was anticipated that after the combination, the staff and operational stores could be streamlined to avoid wasteful duplication, procedures could be simplified to increase work efficiency, and costs could be reduced to enhance economic results. By means of fully developing the land, thereby jointly bringing prosperity to the local, the two enterprises could share the operational success. The promotion of their business competition efficiency would have a positive effect on overall economic results. Furthermore, Tai Sugar's business was primarily the production of sugar, the processing of meat products, and construction. The portion of business item overlap with SSCL on its operation of convenient stores was not its main business operation items. Therefore, the combination had no direct and obvious impact on the certain retail sales market. Because the combination in this case did not involve any industrial integration but only the combination of enterprises for expanding their sales stores, the combination would not have a negative impact on the competitiveness and order of the domestic market. The portion of overlap between the two enterprises' business items was in the area of retail sales. Any potential competitor could enter or withdraw from the [retail sales] market in accordance with the law. There was no obvious restriction or hindrance. In conclusion, the combination in this case would have a limited effect on the industrial competition, and as it would not involve industrial integration, the combination would not negatively affect the competitiveness and order of the domestic market. The combination would not hamper the development of economic benefits as a whole. Given that the economic benefits of the combination would outweigh the detriments of the restriction on competition, the Fair Trade Commission granted approval for the combination in accordance with the provisions of Article 12 of the Fair Trade Law.
Summarized by Lin, Yi-chao
Supervised by Hsu, Shu-hsing
Appendix:
Save & Save Company Limited' s Uniform Invoice No.: 84442769
Taiwan Sugar Corporation Limited' s Uniform Invoice No.: 008618870014