Milk companies get heavy fines

Three major milk manufacturers, who account for about 80 percent of the nation’s milk supply, were fined by the Fair Trade Commission yesterday for violating Article 14 of the Fair Trade Act (公平交易法), which prohibits concerted action increasing the price of similar products simultaneously, the commission said.

The commission said in a press release it fined Uni-President Enterprises Corp NT$10 million (US$332,000), Wei Chuan Foods Corp NT$12 million and Kuang Chuan Dairy Corp NT$8 million.
The three companies all raised their fresh milk retail prices this month after the Council of Agriculture increased the raw milk procurement price by NT$1.9 per liter.
Taking a 1 liter carton of fresh milk as an example, the price of Wei Chuan’s Lin Feng Ying brand milk rose from NT$77 to NT$83, while Uni-President’s Rui Suei milk increased from NT$76 to NT$82 and Kuang Chuan’s Ru Hsiang Shih Chia brand rose from NT$76 to NT$82.

The FTC said the differences in fines were because the enterprises differed from each other in terms of market share and operational revenue, as well as their willingness to cooperate with the commission’s price-fixing probe.
The commission took the action following a public outcry over the price hike of between NT$5 and NT$10 for a cup of freshly brewed coffee at franchise convenience stores around the country, which was explained as an adjustment resulting from the increase in fresh milk prices.
In response, Wei Chuan said the hike was an adjustment to reflect higher overhead costs, while Uni-President and Kuang Chuan declined to comment, saying they haven’t received related official documents.

Separately yesterday, the Consumers’ Foundation accused convenience stores and chain coffee shops of “unreasonably” increasing the price of freshly brewed coffee, which could lead to price fluctuations for other daily items.
At a press conference held to unveil the results of its investigation into the increase in coffee prices, foundation secretary-general Chen Chih-yi (陳智義) said it was unreasonable to increase the prices of all types of freshly brewed coffee drinks sold at convenience stores by NT$5 per cup, regardless of whether they contain milk or not.

“Leading coffee chain Starbucks increased the price of milk-containing coffee by NT$10 per cup, black coffee by NT$5 per cup and even NT$10 for its soybean latte, which contains no milk whatsoever,” Chen said, adding it was even more unreasonable for all coffee chains to raise their prices at the same time.
Chen said that based on data found on professional investment Web sites, the international price of coffee beans had dropped 27.6 percent this month.
Foundation chairwoman Joann Su (蘇錦霞) said retailers should not use the increase in milk prices as an excuse to increase revenue.

The foundation said the price increase had greatly affected the country’s large population of coffee drinkers and urged the commission to fine the companies and set a deadline by which they must readjust their prices.
“Meanwhile, customers should boycott these products to reflect their dissatisfaction with the companies,” the foundation said.