Manila: Philippine authorities have fined 6 companies a combined 1.76 billion pesos ($27.9 million, £21 million) over an alleged onion cartel linked to a sharp rise in prices during the country’s 2022 food crisis.
The Philippine Competition Commission (PCC) stated that the companies, which include onion importers and storage and shipping firms, were penalised for participating in an illegal market allocation scheme. The commission described the penalty as the largest since its establishment in 2016.
Onions are a staple ingredient in Philippine kitchens. Prices surged to a record 800 pesos per kilogram in 2022, exceeding the country’s daily minimum wage and making the vegetable more expensive than meat.
The price shock put pressure on Ferdinand Marcos Jr, President of Philippines promised to reduce rising food costs after taking office. Authorities approved emergency onion imports to address the shortage, while Marcos pledged to pursue those responsible for the crisis.
Between late 2022 and early 2023, onions became scarce enough to disappear from some restaurant menus. The shortage also prompted smuggling attempts. The vegetable became an unusual status symbol, with onions even used as a wedding bouquet on at least one occasion.
A parliamentary committee investigating the crisis concluded that a cartel had contributed to an artificial increase in onion prices. The PCC remarked that evidence recovered during raids showed that the 6 companies collectively controlled nearly 50 percent of all approved onion import clearances in 2020 and 2021.
The commission added that the firms were involved in an illegal arrangement covering onion imports, cold storage and wholesale distribution. The findings linked the companies market activities to concerns over competition in the onion supply chain.
The crisis eased later in 2023 when a bumper harvest of locally grown onions reached the market. Increased domestic supply helped stabilise prices after months of shortages and high costs for consumers.
The PCC noted that the substantial penalty demonstrated its commitment to holding cartels accountable across economic sectors and protecting consumers from the effects of anti-competitive practices.
The commission added that the companies could also face criminal prosecution by the Department of Justice. The potential criminal proceedings over the onion cartel would be separate from the financial penalties imposed by the competition regulator.
YOU MAY LIKE | Istanbul faces severe flooding after record rainfall in 84 years
