The Fair Trade Commission (FTC) yesterday slapped a NT$11.5 million (US$0.35 million) fine on three dairy producers for unreasonably price hikes.
Uni-President Enterprises Corp (
These leading milk producers -- which together control 80 percent of the market -- began raising the price of milk products on Aug. 1.
The price hike came in the wake of the Council of Agriculture's decision to raise the price of milk and other raw materials, which ultimately led to increased costs including packaging and transportation costs.
The FTC set up a task force on July 19 to monitor the companies' simultaneous increases in fresh milk prices after the media reported on the issue. The task force probed the three vendors from July 23 to July 26.
"These companies violated the Fair Trade Act by ignoring consumers' interests and violating fair competition rules," the FTC said in a statement.
The commission called on vendors to play by the rules and not exploit consumers, who it said are already concerned as a result of the recent price hikes for various goods.
"If companies manipulate the pricing mechanism or how the market functions, thereby violating consumers' rights, we will slap severe fines of up to NT$25 million on them," the commission said, citing Article 41 of the Fair Trade Act (
The latest government statistics showed that, for the first seven months of the year, consumer prices were up 0.47 percent from the same period last year, while the wholesale price index (WPI) was up 6.65 percent, indicating that manufacturers had largely absorbed the increased costs themselves and not passed them on to consumers.
Even so, the commission yesterday urged consumers to compare products and prices before making purchases, as most supermarkets and hypermarkets use product promotions to win customers in the face of stiff competition.
Meanwhile, Wei Chuan Foods said that the company would have to wait until it gets a formal notification from the commission before responding to the penalty.
"We have to consider the cost of milk and packaging for our products," said a manager in charge of dairy products, who requested anonymity.
Wei Chuan Foods increased the prices of fresh milk products by as much as 11 percent this month, which was the steepest hike in recent years, he said.
In the past, the company normally cut short the promotional period for its beverages to cope with the rise in material costs, he said.
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