Taiwan Sugar Company Hsin Ying Plant [inquirer] purchase of polyacrylic resins
Chinese Taipei
Case:
Taiwan Sugar Company Hsin Ying Plant [inquirer] purchase of polyacrylic resins
Key words:
Resin, Taiwan Sugar Company Hsin Ying Plant, Yung Chia Company, Fu Chu Company
Reference:
Fair Trade Commission Decision of 13 May 1998 (the 340th Commission Meeting); Letter (87) Kung Er Tzu No. 8506754-017
Industry:
Petroleum and Coal Products Manufacturing Industry (2120)
Relevant Laws:
Article 14 of the Fair Trade Law
Summary:
The inquirer informed the Fair Trade Commission that its plastics factory needed about 1.4 million kilograms of polyacrylic resins per year, and that Yung Chia and Fu Chu had long been the joint suppliers. The sale price of the resins was based on the price at delivery and it completely depended upon the monthly listed price set by these two companies. The inquirer submitted to this Commission the following questions: (1) Were the two companies the only two suppliers of polyacrylic resins in Chinese Taipei? (2) Was it a concerted action for the suppliers to co-contract the supply at an agreed upon price? (3) What measures could it take in response to the unequal contract of sale?
During 1997, Yung Chia and Fu Chu sold the inquirer 640 metric tons of resin 366 and 590 metrics tons of resin 1040F. Such volume of the two resins took a product percentage of 0.28% and 0.32% respectively of the two companies' annual output. The inquirer's demand had no influence on the monthly listed price set by the two companies. The two companies were the major local suppliers of the resins. Therefore, where the inquirer specified to purchase Fu Chu's PC336 resin or 1040F resins, it is quite normal for Fu Chu and Yung Chia to set their price by taking into account the other’s supply price, sales and production situation. In addition, it was the inquirer that determined the purchase method. Both companies delivered their supply monthly just in accordance with the agreement. There was no substantial evidence proving that the Fu Chu and Yung Chia were engaged in communication and agreement regarding price negotiation, quote and supply. This Commission could not hold them in violation of Article 14 of the Fair Trade Law for concerted action.
According to the statistics of the Chemical Industries Association and the Taiwan Synthetic Resins Manufacturers Association, though there are only two manufacturing suppliers of polyacrylic resins, i.e., Yung Chia and Fu Chu. 164,943 metric tons of polyacrylic resins were imported during the year 1996, which was 33% of the demand in Chinese Taipei. Polyacrylic resins were not limited to be supplied locally by Yung Chia and Fu Chu. The inquirer might consider the possibility of inviting importers to tender.
Summarized by Wang, Hung-hsuan
Supervised by Li, Yen-hsi