Camerons association being investigated for alleged price-fixing

STAR, 23 July 2012

PETALING JAYA: The Malaysia Competition Commission (MyCC) is investigating the Cameron Highlands Floriculturist Association (CHFA) for allegedly fixing prices of flowers sold to distributors and wholesalers. This follows a news report in The Star in March which quoted CHFApresident Lee Peng Fo as saying the association would increase flower prices by 10% due to the rising cost of materials and labour.

MyCC chief executive officer Shila Dorai Raj said under the Competition Act 2010, it is a violation when enterprises in the same level of production or supply chain agree to fix the price of their goods or services.

This is deemed to significantly prevent, restrict or distort competition for the goods. A decision by an association is also defined as an agreement under the Act.

“Generally, trade guilds or associations and bodies representing businesses are formed to safeguard the interests of its members, to increase productivity and efficiency as well as provide better products to their stakeholders.

“However in Malaysia these bodies continue to be involved directly or indirectly in the business operations of their members by deciding how much a member should produce or at what price he should sell his produce.

“This interference can tantamount to a violation of the Competition Act, which is aimed at protecting the process of competition to ensure the consumers’ interests are protected,” she said in a statement yesterday.

She said MyCC would continue to monitor the activities of all trade associations, including professional bodies to ensure that they did not indulge in activities which could stifle competition and violate the Act.

An infringement under this Act may attract a penalty of not more than 10% of the worldwide turnover of an enterprise over the period of the infringement.

CHFA secretary Yong Leong Meng said that the association had submitted a letter to MyCC explaining its rationale for the price increase.

“What is there to investigate? This is a free market. The prices of everything has increased, so we have no choice but to raise flower prices by 10%. It is not unlawful (to do so),” he said.