Yuan-I Agricultural and Husbandry Co. (hereinafter referred as to Yuan-I) and other nineteen frozen (pork) meat enterprises violate the Fair Trade Law for concerted action with other competitory businesses in price fixing on raw hog skin and other commodities

Chinese Taipei

Case:

Yuan-I Agricultural and Husbandry Co. (hereinafter referred as to Yuan-I) and other nineteen frozen (pork) meat enterprises violate the Fair Trade Law for concerted action with other competitory businesses in price fixing on raw hog skin and other commodities

Key Words:

frozen (pork) meat, concerted actions

Reference:

Letter of (84) Kung Er Tse 8402469

Industry:

manufacturing industry of leather and the products (15)

Relevant Law:

Article 14 of the Fair Trade Law

Summary:

1. It is provided for in Article 14 of the Fair Trade Law that enterprises may not engage in concerted actions. According further to Articles 7 and 14 of the Fair Trade Law and Article 2 of the Enforcement Rules of the Fair Trade Law, the elements of a concerted action between enterprises include: (1) the enterprises enter into a contract, agreement, or other form of mutual understanding; (2) the counterpart(s) of the enterprise entering into such mutual understanding must have competitory relations with the enterprise inquisition; (3) there is an act to mutually restrict the activities of the enterprises concerned by means of jointly determining the prices of goods or services, or restricting the quantities, technology, products, equipment, trading counterpart(s) or trading territories; and (4) the concerted action is effected among enterprises at the same level of production or distribution that is sufficient to affect market function of production, trading of goods or supply and demand of services.

2. This case was originated from a complaint of the leather industries brought forth by Legislator Yu Hung alleging that their livelihood are being affected by the monopoly in the domestic raw hog skin market, and thus requesting the Fair Trade Commission (FTC) to investigate the case and to take appropriate disciplinary action. Based on the information relating to domestic raw hog skin production enterprises provided by the Taiwan Frozen Meat Packers Association at the request of the FTC, it is found through further investigation that after enforcement of the Fair Trade Law, Yuan-I, Cherng-Tse and 18 other frozen meat producers still continue their customary practice by calling a meeting at the end of each month at the Technical Service Center of Taiwan Meat Product Industry Development Foundation to discuss the reference prices for domestic sale of meat products and their by-products (Usually, all these 20 companies will send their respective representatives to attend the meeting, except with special reason), and to determine the selling prices (Certain enterprises indicated that except the price of raw hog skin which can be uniformed easily, the prices of meat products and their by-products of same category sometimes cannot be uniformly fixed due to difference in product specifications and in the place of production.). Consequently, the enterprises participating in that arrangement always effect the price raising at the same time and the same amount.

3. Notwithstanding the fact that Yuan-I and other nineteen frozen meat producers sometimes have to increase their raw hog skin price in response to the raw skin supply and demand condition on the international market, their act in reaching a mutual understanding at a regular meeting so as to determine the amount and time of price raising in respect of a particular commodity has caused the enterprises of the same trade to adjust their prices at a nearly uniform level with a result sufficient to restrict the competition in the market as well as the business activities of enterprises. Their act is therefore considered to have met the four constituent elements of a concerted action as defined in Article 7 and Article 14 of the Fair Trade Law and Article 2 of the Enforcement Rules of the Fair Trade Law and has violated Article 14 of the Fair Trade Law.

Summarized by Hou, Wen Hsien
Supervised by Shih, Chin Tsun

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