Competition Law & Anti-Trust

PCC rejects URC Voluntary pledges on Sugar Mill Buyout

Date: 25 January 2019; Type: Legal News; Source: Philippines News Agency

MANILA, Jan 25 (PNA) - The Philippine Competition Commission (PCC) announced on Friday that it has rejected the voluntary commitments offered by Universal Robina Corp. (URC) in its acquisition of Central Azucarera Don Pedro, Inc. (CADPI) in Batangas.

PCC Chairman Arsenio Balisacan said in a press conference that the antitrust body did not find that voluntary commitments of URC will address anticompetitive effects in sugarcane milling services in the provinces of Batangas, Cavite, Laguna, and Quezon.

“After careful deliberation and consultation with the affected stakeholders, the Commission decided last Tuesday to reject the voluntary commitments offered by the parties, as these do not sufficiently address the anticompetitive effects arising from the transaction,” Balisacan said.

To recall, URC notified the PCC of its acquisition of the milling and refining assets of CADPI in Nasugbu, Batangas.

URC will also buy the land where CADPI milling and refining assets are located, which is owned by Roxas Holdings, Inc.

In the revised proposed commitments of the URC, the company listed some commitments, such as increasing sugar recovery rates, performing capital upgrades, maintaining trucking allowances, and providing planter assistance. It also proposed commitments on sharing ratios and feedback from stakeholders.

Despite these commitments, the Commission believes that the transaction will still result in the lessening of competition in sugarcane milling services in said provinces of southern Luzon.

Sugar farmers earlier expressed opposition to this acquisition deal and submitted their concerns to the PCC.

The Luzon Federation of Sugarcane Growers Association (Luzonfed) are deeply concerned that the acquisition of CADPI by URC would result in the imposition of lower prices on crops, as URC will own the two sugar milling facilities in Batangas.

In 2016, URC bought the lone competitor of CADPI in sugar milling in Batangas, which is now URC Balayan.

“The PCC will now proceed with the review track of this merger-to-monopoly transaction,” Balisacan said.

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