Philippines Fines ‘Onion Cartel’ $28 Million Over Price Surge, Know Key Details

The Philippine Competition Commission (PCC) has fined six companies 1.76 billion pesos ($27.9m; £21m) after years of investigation for operating an "onion cartel" that caused the price of the onion to rise unexpectedly.

The PCC said evidence seized during raids showed that the six companies held nearly 50% of all approved onion import clearances in 2020 and 2021, according to BBC. The commission said the firms took part in an “illegal market allocation scheme” involving onion imports, cold storage and wholesale distribution.

The names of the companies that are accused are: Golden Shine International Freight Forwarders Corp, Tian Long Corp, La Reina Fresh Vegetables & Young Indoor Plants Inc, Yom Trading Corp, and sole proprietors Mark Castro Ocampo of Vegefru Producing Store and Nancy Collanta Rosal of Rosal Fruit and Vegetable Trading, according to Inquirer.

PCC said that the heavy fines were to show accountability. In a statement, it said, “commitment to holding cartels accountable across all sectors of the economy and protecting consumers from the harmful effects of anti-competitive conduct."

What Happened?

In 2022, onion prices in the Philippines, a kitchen staple, hit a record 800 pesos per kilogram. This was more than the country’s daily minimum wage and made onions more expensive than meat.

The crisis put pressure on the then-newly elected President Ferdinand Marcos Jr., who had promised to lower rising food prices. Authorities approved emergency onion imports, while Marcos vowed to pursue those responsible for the shortage.

He said their actions meant “Filipinos dying from starvation and poverty,” BBC reported. The crisis eased later in 2023, when a bumper harvest of locally grown onions reached the market, and prices stabilised.

In the investigation, the traders were found to have breached Section 14(b)(2) of the Philippine Competition Act, which bans competitors from making agreements to divide markets by sales volume, location, products, customers, or other means.

Largest Fine In History

The P1.76-billion penalty is the largest the Philippine Competition Commission (PCC) has imposed so far. Under the Philippine Competition Act, fines must be tripled when cases involve prime commodities such as onions, according to the Inquirer.

The PCC imposed the maximum fine of P330 million each on La Reina, Yom Trading, Vegefru, and Rosal Fruit. Tian Long and its officer, Pabilona, were fined P118.32 million.

What’s Next?

The companies were also ordered to permanently stop the illegal market-sharing arrangement, in addition to paying the fines. The PCC is considering possible criminal charges and may refer the case to the Department of Justice (DOJ).

The administrative case is separate from any criminal proceedings. The DOJ would have to review the evidence independently to decide whether there are grounds for prosecution.

PCC Executive Director Kenneth Tanate warned that companies failing to follow the order could face further fines of between P60,000 and P2.5 million. They could also be charged P55,000 for every day they delay compliance, starting 45 days after the decision is issued, according to Inquirer.