ANTI-TRUST CASE AGAINST NESTLE PHILIPPINES FILED IN RTC QC

MORE ON THE COMPETITION AUTHORITY

"DOJ as competition authority"
by
Lito U. Gagni
BUSINESS MIRROR, Market Files, 20 September 2011
(Original article available here)

"CAN the Department of Justice (DOJ) pursue a similar line of complaint that the US DOJ advocated against a looming merger between AT&T and T-Mobile on issues of dominance that is now the subject of a controversy involving Philippine Long Distance Telephone Co. (PLDT) and Digital Telecom, which owns Sun Cellular? This merger issue, we believe, is at the heart of an executive order that sought to make DOJ as a competition authority.

As of yesterday, the state attorneys general of New York, Washington, California, Illinois, Massachusetts, Ohio and Pennsylvania have joined the US Justice Department in its suit against the proposed acquisition by AT&T of T-Mobile.

One needs only to look at what is happening in the US to determine that the proposed acquisition by PLDT of Sun Cellular would mean a 70-percent control of the frequency, the digital roadway, which smacks of dominance and goes against the grain of letting competition dictate the tempo of the business game. This is why it is important to look at what’s happening in the US in the business of telcos to know that PLDT’s acquisition of Sun would have the same impact as that of AT&T’s on T-Mobile and should, therefore, be an occasion for the DOJ to pursue its mandate as the competition authority.

No less than President Aquino sounded the alarm on the return of the monopolies. Remember that it was during the dark days of the monopoly of PLDT when 98 percent of the population was waiting for a line and 2  percent was waiting for a dial tone. This quotable quote from Singapore’s Lee Kwan Yew was what possibly moved then-President Fidel V. Ramos to open the telco industry to other players.

That opening of the telecom industry to other players is what allowed the Philippines to become an investment destination and now we are reaping the benefits of that Ramos vision to rid the sector of the monopolistic situation. As a result, thousands of jobs were created, with the business-process outsourcing industry leading the way. It is thus unfortunate to know that the telco sector is again being threatened by the PLDT-Sun deal. Perhaps, the DOJ can look at the options open to prevent a repeat of the problem. For starters, it may want to google the AT&T-T-Mobile deal and discover how US state attorneys are doing it.

xxx"

Atty. Lorna Kapunan talks to Karen Davila on anti-trust - HEADSTART, ABS CBN News Channel

Image from Karen Davila here.

16 June 2011 - Atty. Lorna Kapunan was a guest this morning at ANC Headstart, hosted by Karen Davila.   Atty. Kapunan talked about the need for a comprehensive anti-trust bill and how large companies and foreign multinationals such as Nestle Philippines, Inc. continue to get away with possible anti-trust violations because of the lack of a regulatory body with teeth.

The show "Get a 'Headstart' with Karen Davila" is a daily news program which airs live every 8:00 am at the ABS-CBN News Channel (ANC) (Skycable Channel 27).

ANCALERTS Twitter updates - Kapunan on anti-trust

Twitter updates from ABS-CBN News Channel / ANCALERTS.

URL: http://twitter.com/ANCALERTS

 

ANCALERTS: Kapunan: An anti-trust law will control unfair pricing, protect small & medium firms

5 hours 22 min ago

ANCALERTS: Kapunan: An anti-trust law will control unfair pricing, protect small & medium firms

ANCALERTS: Kapunan: There's no gov't agency that monitors pricing. Some argue that pricing is a function of the open market but that is not so.

5 hours 28 min ago

ANCALERTS: Kapunan: There's no gov't agency that monitors pricing. Some argue that pricing is a function of the open market but that is not so.

ANCALERTS: Kapunan on PLDT-Sun merger: What makes it dangerous is 'cartelization'. They may appear as competitors but it is open to price manipulation.

5 hours 30 min ago

ANCALERTS: Kapunan on PLDT-Sun merger: What makes it dangerous is 'cartelization'. They may appear as competitors but it is open to price manipulation.

ANCALERTS: Kapunan: An anti-trust law crucial because 95% of businesses here are SMEs that the anti-trust bill seek to protect

5 hours 33 min ago

ANCALERTS: Kapunan: An anti-trust law crucial because 95% of businesses here are SMEs that the anti-trust bill seek to protect

ANCALERTS: Kapunan: There's no anti-trust code in the country. What we have are separate legislation in separate laws. That's why it's easy to violate.

5 hours 34 min ago

ANCALERTS: Kapunan: There's no anti-trust code in the country. What we have are separate legislation in separate laws. That's why it's easy to violate.

ANCALERTS: Now on ANC: RT @Karen_DaviLa: Atty. Lorna Kapunan talks about need for "Anti-Trust Code" in Philippines http://j.mp/kLt54o

5 hours 35 min ago

ANCALERTS: Now on ANC: RT @Karen_DaviLa: Atty. Lorna Kapunan talks about need for "Anti-Trust Code" in Philippines http://j.mp/kLt54o

  

Source: http://www.abs-cbnnews.com/aggregator/sources/22?page=2

100th birthday for Nestlé Philippines

Nestlé Philippines' 100th birthday

by Ducky Paredes

Published 16 June 2011 in MALAYA, Business Insight

(Original article available online here)

"IN commemoration of Nestlé Philippines’ 100th year anniversary, the local subsidiary of the world’s largest food and nutrition company will have two very special visitors -- Paul Bulcke, Nestlé S.A. Chief Executive Officer, and Frits Van Dijk, Nestlé S.A Executive Vice President and Zone Director for Asia, Oceania, Africa, and the Middle East -- for a couple of days in order to make Nestlé’s milestone year even more significant. 

Surely, their presence here will boost the morale of well-meaning Nestlé Philippines (NPI) employees — after all, how many times do the highest-ranking executives of a top-50 global corporation visit the country? The company has invested greatly in its centennial celebration, (including a tri-media and online advertising campaign and various CSR initiatives). The arrival of Bulcke and Van Dijk is therefore envisioned to be the shining star among a long list of activities. 

While goodwill creation may be the primary reason for the visit, my NPI source hints that it is also an information gathering activity. Pardon the coffee-inspired pun, but their trip may also serve a "3-in-1" purpose that will ultimately help Nestlé S.A. decide on whether they will intervene in certain issues that have served as a self-created plague destroying the Nestlé’s Philippine office. 

The first chore for the two Nestlé bigwigs is to examine the unresolved labor issue in their Cabuyao plant. Nine years has passed since more than 600 plant employees went on strike to enforce their right to negotiate their retirement benefits, and this labor-management conflict has drawn the attention of local and international media, human rights advocates, and cause-oriented groups.

The Cabuyao issue is particularly volatile. Very much contrary to the good image that Nestlé promotes for itself, this issue has resulted in 23 strike deaths, including those of union leader Meliton Roxas and the man who replaced him, Diosdado Fortuna. Roxas was killed right in front of the picket line in the middle of a protest, while Fortuna was killed on his way home. Without pointing any fingers, any outside observer would have to conclude that their and the 21 other killings could well have been strike-related.

There are also unresolved legal issues. While our Supreme Court has handed down repeated rulings in favor of the workers, NPI has chosen to simply ignore the Court. Last 2006, in fact, the Court explicitly ordered Nestlé management to call back its workers and initiate formal negotiations. Five years later, NPI has done nothing – NPI has not called back the workers; nor has it resumed formal talks.

Another item supposedly on the Nestlé S.A. agenda is the propensity of NPI’s top management to get themselves into legal trouble. At present, a number of their top executives – John Miller, Shahab Bachani, and Nandu Nandkishore – are facing perjury charges in Regional Trial Courts in both Quezon City and Makati. Miller happens to be the present Chief Executive Officer of Nestlé Philippines. One has to wonder how that looks as far as Nestlé S.A. is concerned.

Moreover, NPI’s legal entanglements do not end with their executives. The Philippines’ largest bank, Banco de Oro, is suing the company for false and deceptive testimony. While lawsuits may be a normal part of doing business when one is the size of Nestlé Philippines, to have the country’s biggest financial institution suing you for lying has to be an entirely different reality.

Finally, another issue that Bulcke and Van Dijk are reportedly monitoring is the possibility of a comprehensive Anti-Trust Bill finally being passed into law. Being alluded to many times as the poster boy for corporate bullying and exemplifying a tyrannical multinational, the spotlight would be right at NPI if ever this legislation pushes through. Even now, a number of their bankrupt distributors have gone to the Department of Trade and Industry (DTI) with complaints of predatory pricing and lack of corporate ethics complaints against NPI. 

The anti-trust issue has gained a lot of legislative momentum and with the diatribes of anti-trust advocate Lorna Kapunan, among the lawyers of anti-NPI clients, the movement towards an anti-trust Law is gaining even more ground. Considering the number of pressing matters that Bulcke and Van Dijk have to attend to, I sure hope they drank a lot of coffee and ate their cereal. They’re going to need Olympic energy to tackle the mess that Nestlé Philippines has made of what Nestlé S.A. means to Filipinos."

Malaya responds to Nestle

"That Swiss company" by Ducky Paredes, MALAYA, 13 April 2011

(Original article available online here)

"WARREN Buffett – quite simply – is the greatest investor who has ever lived. He is the primary shareholder, chairman and CEO of Berkshire Hathaway, and the skill with which he has managed billion-dollar funds is the stuff of legend. As of 2011, Buffett’s net worth was estimated at more than US$50 billion – the third richest man in the world.

What drives Buffet who lives in an ordinary house, just like any of his neighbors? For several years now, he has been trying to give away his fortune to philanthropic causes. He travels all over the world, encouraging other billionaires to do the same. Buffett knows that "you can’t take it with you."

Now why exactly am I writing about Warren Buffett? For over a year now, I have written several items calling the public’s attention to the bullying behavior of Nestlé Philippines, Inc. (NPI). Specifically, the way it treats local distributors – in other words, Filipino small and medium enterprise owners – is nothing short of shameful.

A number of these distributors have sought the intervention of the Department of Trade and Industry (DTI), only to be inexplicably told that this is not within their jurisdiction. These ill-treated entrepreneurs have since found an ally in antitrust crusader and noted lawyer Lorna Kapunan, who has brought the matter to the attention of the Senate.

In looking for where to invest, Warren Buffett advises: "Don’t just invest in a company and its ability to turn in a profit. Find out how the company behaves, and the integrity of the people running it. Would you trust them with the keys to your house? The best ship in the world will get lost at sea, or even sink, if the captain and his crew are questionable".

Tomorrow, April 14 is the 44th Annual General Meeting for Nestlé shareholders in Lausanne, Switzerland. I wonder how many of these shareholders subscribe to Warren Buffett’s way of thinking, and are willing to apply it to Nestlé? Is the mother company aware of what’s happening here in the Philippines?

Probably. For instance, last October, the Children’s Food Campaign (CFC) in Britain blasted Nestle for misusing the British government’s Change4Life (C4L) anti-obesity campaign. The whole idea behind C4L was for people to cut down on fattening food, be more active and live longer.

Nestle used the CFC logo in its marketing campaign but Sustain, the alliance behind CFC, soon found out that 24 out of the 27 products included in the Nestle promotion were categorized as high in sugar by the British Food Standards Agency guidelines. CFC finally decided that no company that promotes unhealthy and junk food should be allowed to associate with a government health campaign.

Locally, while the Nestle ad on TV and print featuring Kris Aquino and her son uses the tagline "more milk, less sugar" probably referring to a miniscule difference in sugar content compared to a competing product’s sugar content, isn’t Nestle, in reality, a major sugar pusher with its ice cream, chocolates, iced tea and practically everything that Nestle produces? Is there anything that Nestle produces that is not heavy with sugar?

Clearly, Nestle is not run by anyone close to being a Warren Buffet who cares about what his company represents.

Imagine that one of the highest-ranking officials of the Nestle Company is Nandu Nandkishore, who used to be the Chief Executive Officer of NPI until he got promoted to Nestlé’s Executive Board as Head of Nutrition. That’s a giant leap for someone who actually faces charges of perjury in Makati and Quezon City courts. How many global companies have a person facing criminal charges on their Executive Board?

In the Australian Senate, Senator Gavin Marshall of the Labor Party last March 2, 2011 talked about the unresolved case of the Nestle factory workers in Cabuyao, Laguna. The senator said that these workers have been on strike for over ten years and that over 500 workers have been dismissed for simply trying to exercise their right to have retirement benefits included in their collective bargaining agreement (CBC).

According to Senator Marshall, Nestle has also defied a decision by the Supreme Court to allow a decent retirement plan to be included in the CBA for the factory workers and that Nestle also refuses to reinstate the striking workers and negotiated in good faith on the CBA.

Finally, if you talk about integrity, how can Nestlé in Switzerland tolerate the predatory pricing and vertical price restraint operations of Nestlé Philippines, when these are patently against the laws set forth even in Switzerland itself by the Swiss Competition Council?

*** "

Nestle Antitrust cases - Soprole

Chile Soprole, Nestle To Step Away From Planned Joint Venture

First Published Tuesday, 5 April 2011 05:41 pm - © 2011 Dow Jones

Available online in Automated Trader here.

ANTIAGO -(Dow Jones)- Following opposition from Chile's antitrust office, Swiss food and beverage giant Nestle SA (NESN.VX, NSRGY) and local dairy products maker Soprole SA will step away from their planned joint venture, the companies said Tuesday.

The Chilean antitrust office, known locally as the FNE, said in March that it opposed the planned joint venture, which would have included the manufacture, retail and distribution of various dairy products under the DPA Chile moniker.

"The conditions needed to proceed with the merger process are missing," the companies said in a joint statement, adding that they won't be pursuing the matter further with Chilean authorities.

Chile's antitrust court was set to rule on the venture later this year.

Last month, the FNE rejected the joint venture in spite of measures established by the companies to offset any negative market effects.

The FNE said the operation will restrict free competition among dairy producers and increase consumer prices. Additionally, the FNE found the proposed mitigation measures inefficient and difficult to implement.

Nestle and Soprole announced the venture in November.

Fonterra Dairy Co-operative Group Ltd. has a 99.8% stake in Soprole, Chile's leading consumer dairy business, with around one-third of the total market.

-By Anthony Esposito, Dow Jones Newswires; 56-2-715-8929;anthony.esposito@dowjones.com

Elsewhere in the globe - Nestle anti-trust cases - Soprole

Chile's Antitrust Office Opposes Nestle, Soprole Joint Venture

First Published Wednesday, 9 March 2011 01:07 pm - © 2011 Dow Jones

Article available online in Automated Trader here.

ANTIAGO -(Dow Jones)- Following opposition from Chile's antitrust office, Swiss food and beverage giant Nestle SA (NESN.VX, NSRGY) and local dairy products maker Soprole SA will step away from their planned joint venture, the companies said Tuesday.

The Chilean antitrust office, known locally as the FNE, said in March that it opposed the planned joint venture, which would have included the manufacture, retail and distribution of various dairy products under the DPA Chile moniker.

"The conditions needed to proceed with the merger process are missing," the companies said in a joint statement, adding that they won't be pursuing the matter further with Chilean authorities.

Chile's antitrust court was set to rule on the venture later this year.

Last month, the FNE rejected the joint venture in spite of measures established by the companies to offset any negative market effects.

The FNE said the operation will restrict free competition among dairy producers and increase consumer prices. Additionally, the FNE found the proposed mitigation measures inefficient and difficult to implement.

Nestle and Soprole announced the venture in November.

Fonterra Dairy Co-operative Group Ltd. has a 99.8% stake in Soprole, Chile's leading consumer dairy business, with around one-third of the total market.

-By Anthony Esposito, Dow Jones Newswires; 56-2-715-8929;anthony.esposito@dowjones.com

Elsewhere in the globe - Nestle anti-trust cases - Garoto

Nestle Approaches Brazil to Settle Garoto Antitrust Court Case

by Arnold Galvao - Oct. 5, 2010

Available online in Bloomberg here.

Nestle SA approached the Brazilian government with a proposal to sell assets and settle a six-year court dispute related to its purchase of Chocolates Garoto SA, which was blocked by antitrust regulators, according to two government officials.

The first meeting took place on Sept. 16 at the attorney general’s office, according to Antonio Henrique Pinheiro Silveira and Mariana Tavares, secretaries of the antitrust arms of the Finance Ministry and Justice Ministry, respectively. Silveira and Tavares were present, along with lawyers for Nestle Brasil Ltda. and the attorney general, Luis Inacio Lucena Adams.

“The discussions are very preliminary,” Tavares said in a Sept. 24 telephone interview from Brasilia. Silveira spoke about the matter in a Sept. 23 interview, also in the capital.

Nestle’s proposed purchase of Garoto in 2002 was the first time Brazil’s antitrust regulator, known as Cade, completely rejected an acquisition. Representatives from the regulator weren’t invited to the meeting, according to the officials. Cade President Arthur Badin said by e-mail he had no knowledge of the talks.

The antitrust ruling can’t be reversed out of court without Cade’s approval, Badin said. Any new proposal from Nestle will have to be processed by Cade’s attorney and judged by the agency’s six-strong plenary, he added.

Robin Tickle, a spokesman for Nestle in Vevey, Switzerland, said the company declined to comment on the matter.

After Cade’s decision in 2004, Nestle offered to sell a line of chocolate coatings that it said corresponded to 46 percent of domestic demand for the product. The company also offered to sell chocolate brands. The proposal was rejected by Cade, and Nestle decided to take the matter to court.

Silveira said a Nestle proposal to sell some brands may not be sufficient. He said all competition conditions in the industry must be evaluated, including distribution.

-- With assistance from Clementine Fletcher in London. Editors: Robin Stringer, Laura Price.

To contact the reporter on this story: Arnaldo Galvao in Brasilia at agalvao1@bloomberg.net

To contact the editor responsible for this story: Francisco Marcelino mdeoliveira@bloomberg.net