Anonymous Complaint referred by the Consumer Foundation to the Fair Trade Commission against joint price increase of Styrofoam Utensils in the Market
Chinese Taipei
Case:
Anonymous Complaint referred by the Consumer Foundation to the Fair Trade Commission against joint price increase of Styrofoam Utensils in the Market
Key Words:
Consumer Foundation, environmental protection, Styrofoam
Reference:
Fair Trade Commission Decision of 10 August 1994 (the 148th Commission Meeting), and 17 October 1994 Decision of the 158th Commission Meeting of the Fair Trade Commission, Letters (82) Kung Erh Tzu No. 8253991 and (83) Kung Erh Tzu No. 8365516
Industry:
Waste Disposal Industry (8101)
Relevant Laws:
Summary:
1. The anonymous complaint accused that the eatery utensil distributors conspired a concerted action in a meeting in which they coordinated issues relating to price increase for Styrofoam utensils on February 10, 1993 at Pao Lu Foundation. Pursuant to the Commission's investigation, such distributors did have called a meeting at the Pao Lu Foundation on February 6, 1993 to discuss issues relating to recycling of waste Styrofoam utensils and exchange market information such as product pricing and status of distribution. In the meeting, Hsin Chi and Yu Ch'ing were requested to report on the reasons for product shortage. There was no evidence proving that a concerted action had been conspired. In addition, price lists collected from relevant distributors indicate an average price increase of 6.67% with inconsistent fluctuation of prices and timing. The prices went up primarily because (1) Yu Ch'ing, one of the three major suppliers, exported a large percentage of its products last year (1992); (2) the domestic suppliers reduced the percentage of domestic distribution of their products; and (3) the product supply was reduced during January and February of 1993 when factories closed down and warehouses cleared their stock for the Chinese New Year holidays. Meanwhile, during the same period, the demand increased drastically due to the New Year holidays, good weather, long vacations, and booming business of street vendors. Therefore, the price increased was due to imbalance of supply and demand, rather than the above-mentioned meeting.
2. Whether the selection of environmental recycling agencies constitutes a market access barrier: Article 3 of the "Guidelines of Administration and Assistance for Public and Private Waste Disposal Agencies", which Guidelines set the establishment criteria of waste disposal agencies, stipulates the qualifications of Classes A, B, C, and D waste disposal agencies, their scope of business in waste disposal and processing, and the review standard therefor. The Guidelines require that a Class D waste disposal agency have a paid-in capital of over NT$300,000 and hire at least one Class C disposal technician. This Commission held a seminar on recycling systems for Styrofoam in relation to the Fair Trade Law on April 25, 1994 with the participation of the relevant industries, government agencies, academia and private organizations.
Most of the participants considered it unnecessary to impose such requirement for Class D waste disposal agencies (i.e., the requirement for a paid-in capital of NT$300,000 and recruitment of at least one Class C disposal technician) when it comes to waste materials such as Styrofoam, iron and aluminum cans, and PVC bottles which do not cause repeated pollution during the recycling process. Instead, they believed that the relevant waste recycling markets should be deregulated across the board. In addition, under Article 29(1) of such Guidelines, a business having engaged in such operation prior to the amendment thereto shall apply for a permit within one year from the effective date (May 19, 1993) of such amendment.
However, according to the letter issued by the Environmental Protection Administration ("EPA") in response to this Commission's inquiry and the Commission's subsequent investigation, no business filed any application for the Class D status within such application period. Thus, the qualification requirements for Class D agencies may have constituted a market access barrier in contradiction with the spirit of the Fair Trade Law. To solve this issue, this Commission has consulted with the EPA and exchanged opinions regarding environmental recycling practices and the importance of fair trade in the market. As a result, the EPA has agreed to review the annual recycling plans submitted by all recycling agencies. EPA's first step is to supervise, and demand the transparency of, the recycling methods used by the regional recycling companies who are contracted by the recycling agencies. The second step is for the EPA to gradually lift the qualification requirements for such recycling contractors. In other words, all scavenging businesses and persons willing to join the recycling systems may turn over to any Class D agencies the recyclable waste they have collected. Class D agencies will, in turn, deliver such recyclable waste to the final processing plants. Accordingly, EPA's approach for handling this issue should be adequate for removing the market access barrier.
Summarized by Li, Yen-hsi
Appendix:
Hsin Chi's Uniform Invoice Number: 30841022
Yu Ch'ing's Uniform Invoice Number: 81238709
＠: For information of translation, click here
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