Thirty-one tobacco distributors fined for price-fixing by FTC


TAIPEI — The Fair Trade Commission (FTC) slapped fines totaling NT$21.9 million (US$741,995) on 31 tobacco distributors yesterday for conspiring to fix the prices of various tobacco products.

It marks the first time tobacco dealers in Taiwan have been punished since the FTC was established in 1992.

The results of an investigation by the FTC show that the distributors, affiliated to Japan Tobacco International, held three meetings last May in which they decided to raise the prices of 36 products from June, including Mild Seven cigarettes, the prices of which were increased from NT$660 per carton to NT$680.

Also in the meetings, the distributors agreed to set aside NT$10 to NT$15 from every carton of cigarettes sold and to deposit the funds in accounts they held separately in a Taipei City bank, as a form of insurance to make sure they all stuck to the terms of their price-fixing agreement, the FTC said.

The distributors decided that the deposits could only be withdrawn after three months, and accountants were hired to supervise the distributors to make sure they deposited the money regularly into the accounts, the investigation revealed.

According to FTC spokeswoman Shih Hui-fen, the commission began a probe into the case last June after receiving tip-offs from informers.

The distributors were questioned in July as part of the investigation, prompting them to drop the prices of their products over the following months, Shih said.