Thursday, 20 October 2011

News Breif: Milk companies fined

The Executive Yuan's Fair Trade Commission (行政院公平交易委員會) imposed fines totalling NT$30 million (ca. US$1 million) on the nation's three largest milk sellers for colluding over the increase in the prices of their products, Taiwan's 'independent' news agency CNA reported yesterday (see Chinese-language article here).

FTC Vice Chairwoman Shi Hui-fen (施惠芬) said that whereas the purchase price for a liter of domestically produced milk had been raised NT$1.9, the price of a one-liter container of milk from Wei Chuan (
味全) rose from NT$77 to NT$83, from Uni-President (統一) rose from NT$76 to NT$82, and that of Kuang Chuan (光泉) rose from NT$76 to NT$82, in other words, an across-the-board rise of NT$6. In addition, Wei Chuan raised the price of its 2-liter bottle of milk by NT$12, while Uni-President and Kuang Chuan added NT$11 to their bottles. 

Shi said the three companies offered different explanations for their increases, with Wei Chuan saying it was reflecting the cost of raw materials (
原料價格), and Kuang Chuan saying it was due to a rise in the cost of paper pulp (紙漿價格), and Uni-President blaming the NT$2-rise in milk prices (生乳收購調升近2元).

In deciding the levels of the fines, Shi said that the FTC took into consideration the market share and operating model
of each company. Wei Chuan, which has almost 40% of the market, was fined around NT$12 million, Uni-President, with almost 30%, was fined NT$10 million, and Kuang Chuan, with between 10 and 20%, being fined NT$8 million.

                                                                                                                      Text and photos © Jiyue Publications 2011

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