Hsiluo Agricultural Products Market Co., Ltd. was complained for unfairly collecting wholesale market management fees in violation of the Fair Trade Law
Case:
Hsiluo Agricultural Products Market Co., Ltd. was complained for unfairly collecting wholesale market management fees in violation of the Fair Trade Law
Key Words:
produce wholesale market, Agricultural Products Market Trading Law
Reference:
Fair Trade Commission Decision of November 1, 2001(the 521st Commissioners' Meeting)
Industry:
Produce Wholesale Industry (4412)
Relevant Law:
Article 24 of the Fair Trade Law
Summary:
1. The Yunlin County Produce Association made the following allegations in a letter: According to Article 21 of the Agricultural Products Market Trading Law, "The initial wholesale trading of agricultural products shall take place in the agricultural products market of the local area." According to Article 11, Paragraph 1 of the Agricultural Products Market Trading Law Enforcement Rules, "Each hsiang (village), chen (township), city, and district shall have one produce market." Hence these laws effectively endow each wholesale market with a monopolistic advantage. Hsiluo Agricultural Products Market Co., Ltd. (the respondent) has such an advantage. Over a long period of time, the respondent has failed to comply with Article 4 of the Agricultural Products Wholesale Market Administration Regulations and Article 13 Paragraph 4 of the Agricultural Products Market Trading Law Enforcement Rules by installing basic facilities for use by operators. The respondent has also arbitrarily raised market management fees. This conduct is alleged to be in violation of Articles 10 and 24 of the Fair Trade Law (FTL). The respondent has also ordered all operators to sign a "Hsiluo Agricultural Products Market Co., Ltd. New Market Operator Stall Use Contract," in which unbalanced rights and obligations on operators' side were stipulated. It also placed the power over dispute resolution exclusive on the respondent. If an operator chose not to sign the contract, it would be regarded as having failed to follow proper procedure and would thus lose its eligibility to operate. Hence, the contract was obviously unfair.2. Between 1996 and 2000, the trading volume of produce at Hsiluo Produce Market averaged 205,634 kilograms per year. This accounted for approximately 16% of total national wholesale trading volume and 7.7% of the total national production volume for the same period. No matter whether in terms of business volume or transaction value, Hsiluo Produce Market surpasses all other wholesale markets in Yunlin County. It is quite obvious that the respondent Hsiluo Market Co. enjoys relative advantageous position regionally. Also, Hsiluo Hsiang (Village) is the most important produce wholesale market in Chinese Taipei. Therefore the respondent can be said to enjoy an advantageous position in the relevant market. However, the fees collected by the respondent did not exceed the official fee collection standards for management fees at produce wholesale markets, which may not exceed five percent of total transaction value according to Article 23, Paragraph 1 of the Agricultural Products Market Trading Law Enforcement Rules. The respondent Hsiluo Market Co. therefore is not technically guilty of abusing its market position to realize improper profits. No violation of the relevant subparagraphs of Article 10 of the FTL could be established.However, taking into consideration the advantageous position held by the respondent, it should follow the legislative intent of the Agricultural Products Market Trading Law to protect the livelihood of farmers and promote efficient supply and sale of agricultural products by exempting all agricultural products wholesale markets from the payments of stamp tax and business tax, and reevaluate its management fee standards and rates based on actual trading conditions to maintain trading order and protect consumers' interest. The Fair Trade Commission therefore made a written request to the competent authority for agricultural affairs asking that it exercise guidance with respect to the respondent's standards for collecting management fees and consider whether adjustments could be made. 3. With respect to whether the respondent had arbitrarily raised its management fees, the Fair Trade Commission found that the respondent had adopted its current management fees on 4 October 1995. At the time, the construction of the wholesale market site had not yet been completed, and the market facilities were unable to accommodate all of the vendors and transporters. The market therefore set up provisional trading sites and charged separate rates for them. After construction was completed, the vendor and transportation firms using the provisional trading sites were moved to the official trading sites and the fees were adjusted accordingly. This did not constitute arbitrary raising of the management fees. In addition, as produce transportation and sales channels in Chinese Taipei are operating smoothly, and there is no substantive evidence that general producers and transportation and sales firms are being subjected to undue pressure. In addition, the "Hsiluo Agricultural Products Market Co., Ltd. New Market Operator Stall Use Contract" entered into in 1998 can be considered an internal regulation stipulating the rights and obligations of both parties. Its content should not have the effect of substantially restricting competition and affecting trading order. Accordingly, there is no concrete evidence to find that the conduct of the respondent Hsiluo Market Co. violated Article 24 of the FTL.Appendix:Hsiluo Agricultural Products Market Co., Ltd.'s Uniform Invoice Number: 64218503Summarized by Hsu, Cho-Yuan; Supervised by Cheng, Chia-Ling