PX Mart Co (全聯實業) has been fined NT$20 million (US$612,820) by the Fair Trade Commission (FTC) for failing to observe a condition set by the commission in 2022 for the approval of its merger with hypermarket chain operator RT-Mart International Ltd (大潤發), the commission said yesterday.
When the merger application was approved in 2022, PX Mart was asked to honor one of the seven conditions imposed by the commission, which prohibited PX Mart from applying the most favored pricing clause to its merchandise suppliers, FTC said in a statement.
However, after acquiring RT-Mart, PX Mart asked merchandise suppliers to provide the same discounts agreed with other distributors when they applied with the supermarket chain to place their new products on its shelves or raise product prices, the commission said.
Photo: CNA
The failure to observe that condition effectively transferred the risks caused by competition between PX Mart and other retailers to its merchandise suppliers, imposing an unnecessary financial burden on them, FTC said.
Although this has ostensibly increased the benefits for consumers by having low-priced goods on PX Mart’s shelves, the reality is that the move aimed to maintain its own profit margin by undermining competition in the distribution channel, it added.
Companies that fail to perform undertakings required by the commission face a fine ranging from NT$200,000 to NT$50 million, as stipulated by the Fair Trade Act (公平交易法), the commission said.
The FTC also has the power to ask a company to demerge, dispose of all or part of its shares, transfer part of its operations or remove certain people from their positions if the company does not observe the commission’s conditions, the commission added.
Another merger condition was that PX Mart maintain its existing policy of allowing suppliers to obtain shelf space without upfront payments for at least three years after the merger,
In December 2021, PX Mart offered NT$11.5 billion to take over 95.97 percent of the shares in RT-Mart from France-based Auchan Retail International SA and Taiwan-based conglomerate Ruentex Group (潤泰集團).
PX Mart has maintained RT-Mart as a separate brand and retained its management team after the merger.
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