Uni-President Enterprises Corp. and Sixteen Other Enterprises

Case:

Key Words:

approval of concerted actions, corn, shared shipping

Reference:

Fair Trade Commission Decision of January 13, 2010 (the 949th Commissioners' Meeting), Disposition Kung Lian Tzu No. 099001

Industry:

Prepared Animal Feeds Manufacturing (0870)

Relevant Laws:

Article 14(1)(v) of the Fair Trade Law

Summary:

1. Uni-President Enterprises Corp. (hereinafter referred to as "Uni-President") and some other enterprises previously filed a concerted application to the FTC for shared shipping of corn procurement. The FTC resolved in its 794th Commissioners' Meeting to approve such concerted application on January 25, 2007. The approval was valid through January 25, 2010 (FTC Disposition Kung Lian Tzu No. 096001) with undertakings required. Since the approval was about to expire, in November 2009 Uni-President, as the representative of all applicants, applied to the FTC for an extension of the approved share shipping of corn procurement for another three years.

2. Findings of the FTC after investigation showed that through the shared shipping of corn procurement, the import costs, storage loss, burden of capital backlog and interests, and procurement risks can be decreased and reduced. In case of any trade dispute occurred, the ability to negotiate collectively can also be increased. Therefore, shared shipping could be beneficial to the overall economic interest. Additionally, corn is subject to free importation. The government has no restrictions on the qualifications of the importers. Enterprises may freely choose shared shipping to apply for importation of corn. Importers that do not participate in shared shipping can also import corn in parcels directly from the suppliers or by cargos. Since there remain numerous import channels without any centralized control by few enterprises, the shared shipping of corn procurement in this case should have only limited impact on the corn market. Furthermore, this concerted action should be so beneficial to the economy as a whole and in the public interest that the application for which shall be approved in accordance with Article 14(1)(v) of the Fair Trade Law.

3. The FTC imposes undertakings with regard to this approval pursuant to Article 15 of the Fair Trade Law. The applicants shall submit a quarterly execution report of this concerted action in writing to the FTC with regard to each importer's registered procurement quantity, actual procurement quantity, procurement loading date, loading port name, date when the ship arrives the loading port, date when the ship departs from the loading port, date when the ship arrives our domestic port, procurement price, each importer's quantity of monthly import, sales, and stocks. In addition, the applicants may not engage in other concerted actions by exploiting this approval or prevent any applicant from freely deciding its procurement quantity, or prohibit any applicant from procuring and importing corn on its own, or refuse other enterprises, without a justifiable ground, to participate in this concerted procurement. Moreover, a report shall be submitted to the FTC for any changes in the applicants of this concerted action. The applicants shall not exploit their market position obtained through this approval and make improper decisions on, maintain, or alter the prices, or impede the fair competition of other enterprises, or engage in other behaviors arising from the exploitation of their market position.

Appendix:
Uni-President Enterprises Corp.'s Uniform Invoice Number: 73251209
Summarized by Li, Shih-Che; Supervised by Liao, Hsien-Chou