Sugar consuming companies requested to formulate a policy for fair sugar prices and to revoke the monopoly of Taiwan Sugar Corp. over import of granulated sugar
Chinese Taipei
Case:
Sugar consuming companies requested to formulate a policy for fair sugar prices and to revoke the monopoly of Taiwan Sugar Corp. over import of granulated sugar
Key Words:
fair sugar prices, sugar policy, monopoly
Reference:
Fair Trade Commission decision of 19 June 1996 Decision (244th Commission Meeting); Disposition (85) Kung Erh Tzu No. 8404846-002
Industry:
Sugar Industry (1161)
Relevant Laws:
Summary:
1. Domestic sugar consuming companies recommend to correct the unfairness of higher domestic sugar prices than international prices, to formulate a fair and reasonable calculation formula for sugar prices, and to revoke the monopoly of Taiwan Sugar Corp. (hereinafter, "TSC") over import of granulated sugar.
2. According to the Fair Trade Commission’s (FTC’s) investigation, sugarcane plantations in Chinese Taipein enjoy comparative advantage in terms of utilization of water resources and arable land as compared with other crops. However, in view of the change of conditions for domestic agricultural production in recent years, the cost of sugar production thus is relative high. Take into consideration of the difficulty for sugarcane farmers to switch to another crop and protection for sugarcane farmers, a proper amount of sugar production should be maintained at the current stage.
3. With regard to sugar consuming companies' recommendation for reduction of domestic sugar prices and revocation of TSC's monopoly of sugar import, the Fair Trade Commission has consulted with relevant government authorities in accordance with Article 9 of the Fair Trade Law and in formulating the Proposal for Adjusting Sugar Management Policies and Sugar Prices. Pursuant to such proposal, the high sugar prices within Chinese Taipei area will be gradually reduced over a fixed transitional period, the quantity of domestically-produced sugar will be reduced each year, and import of sugar will be increased. It is also expected that following expiration of such transitional period, qualifications for importers importing sugar within and out of the quota will be reviewed, depending on the negotiations for Chinese Taipei's accession to the World Trade Organization.
4. Adjustment of sugar industry policies involves industrial and agricultural policies as well as the well-being of sugarcane farmers. In addition, such adjustment is closely associated with the authorities of the Ministry of Economic Affairs and the Council of Agriculture. During the Cabinet Meeting, the Ministry of Economic Affairs was entrusted to plan for and handle this issue. Therefore, regarding the policy-related aspect of this case, the authority of relevant government agencies should be respected. As for individual acts involving the Fair Trade Law, because (1) TSC did not have much price autonomy, (2) management policies for the sugar industry involve a wide range of issues, and (3) the FTC has attended meetings organized by relevant government authorities and adequately expressed the FTC’s standpoints over this matter as a competent authority for the competition law, the issue of TSC’s high sugar prices in this case does not constitute a violation of Article 10 of the Fair Trade Law, which stipulates against abuse of monopolistic market status.
Summarized by Wu, Teh-sheng
Supervised by Shih, Ch'in-tsun
Appendix:
Taiwan Sugar Corp.’s Uniform Invoice No.: 08794905
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