The Council of Agriculture inquires whether its tentative plan with the Fertilizer Transport and Sale Division of Provincial Food Bureau to have purchase, transport, sales and pricing operations for the chemical fertilizer produced by government owned enterprises will violate the Fair Trade Law

Chinese Taipei

Case:

The Council of Agriculture inquires whether its tentative plan with the Fertilizer Transport and Sale Division of Provincial Food Bureau to have purchase, transport, sales and pricing operations for the chemical fertilizer produced by government owned enterprises will violate the Fair Trade Law

Key Words:

fertilizer, unified pricing, Council of Agriculture

Reference:

Fair Trade Commission Decision of November 22, 1995 (215th Commission Meeting); Letter of (84) Kung Er 04155 and 05023

Industry:

Fertilizer Manufacturing Industry (2114)

Relevant Law:

Article 14 of the Fair Trade Law

Summary:

1. Following its preliminary decision pronouncing that the existing fertilized transport and sales system is governed by Article 14 of the Fair Trade Law prohibiting enterprises from forming concerted action, the Fair Trade Commission received a letter from the Council of Agriculture (hereinafter referred to as the "COA") which inquires whether it will violate the Fair Trade Law or not that for stabilizing the supply and demand of fertilizer in Taiwan area and taking care of the requirements of farmers in remote areas, if it authorizes the Fertilizer Transport and Sale Division of Provincial Food Bureau (hereinafter referred to as the "TPFB") through coordination, to carry out a unified operation system for procurement, transport and sale of the chemical fertilizer products produced by the two government owned enterprises namely: Taiwan Fertilizer Co. Ltd. (the "TFC") and Kaohsiung Ammonium Sulfate Co., Ltd. (the "KASC") by acting as the sole and exclusive distributors for such products and appointing the Farmers' Associations in various districts, the Taiwan Sugar Company (hereinafter referred to as the " TSC"), the Taiwan Cooperative for Vegetable and Fruit Transport and Sale (the "TCVFTS") and Taiwan sugar Cane Farmers' Association (the "TSCFA") to distribute the products, with the selling price of such fertilizer products to be unified by "TPFB".

2. Regarding the inquiry from "COA" in its letter whether its tentative plan to authorize, through coordination, APFB to set up a unified operation system for purchase and sale of chemical fertilizer products produced by government owned enterprises and to appoint Farmers' Associations, TSC, TCVFTS and TSCFA to distribute such fertilizer products will be in violation of the Fair Trade Law, (since it had been decided to be a probable case of violation of the Fair Trade Law at the 215th Commission meeting held on November 22, 1995), the Fair Trade Commission considers that it is not appropriate for the COA to substitute the aforeproposed system for the existing planned production and sale system of chemical fertilizer produced by government owned enterprises. COA has expressed its full understanding of this opinion.

3. Regarding the issue as to after February 4, 1996, what approach will COA take to modify the act of making unified adjustment of the selling prices of fertilizer products through concerted arrangement after consulting with various related authorities, the COA has stated that afterwards, the selling price of fertilizer products will be determined based on the supply and demand on the market instead of by concerted pricing act. This part of the issue will be referred to the “Article 46(2) Ad Hoc Review Team” for consolidated consideration in processing relevant issues.

Summarized by Lee, Y.H.

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