Friday, March 11, 2011

To the point: predatory pricing

Appeared in "To The Point" column, Manila Standard Today, by Emil Jurado, on 11 March 2011

"There’s this case filed recently by two Filipino-owned companies against a giant multinational company whose products the local firms distribute. The case bears watching. Service Edge Distribution Inc. and FDI Forefront II Trading Corp. sued Nestle for predatory pricing and perjury.

Predatory pricing is selling one’s products at very low prices to put competitors out of business or discourage them from entering the market. In this case, Nestle allegedly forced SEDI and FDI II to sell products at controlled prices, way below the actual cost of distributing the product, with threat of termination of contract if they failed to do so.

Santa Banana, it’s bad enough to take a low blow against competition. To do something like this to one’s own distributors is one for the books!

The case of perjury involves four top executives of the multinational company who allegedly presented false testimonies as evidence in their counter-affidavits to the complaints filed against them.

Cases such as these that involve not-so-aboveboard practices of some multinational companies doing business in the Philippines give urgency to the passage of an anti-trust law that will protect small and medium enterprises that are owned and managed by Filipinos.

In the Senate, pending are Bill 123 by Senator Serge Osmeña, Bill 1838 by Senator Miriam Defensor Santiago and Resolution 123 by Senator Manny Villar. These call for an inquiry into cartels and monopolies. There is another measure by Senate President Juan Ponce Enrile that prohibits price-fixing and price discrimination.

Representing the private sector in the Senate inquiry is lawyer Lorna Patajo Kapunan, who has brought public attention to the way some multinationals, for the longest time, have taken advantage of the absence of an implementing law that will stop their underhanded practices."

Also available online here.


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