PCC blocks RHI, URC merger

The Philippine Competition Commission (PCC) on Thursday blocked the proposed merger between the sugar millers, saying the transaction would lead to a monopoly.

The anti-trust body, in a statement, said the URC buyout of its lone competitor in the sugarcane milling services market would monopolize the business in Southern Luzon.

It also said the merger would “substantially lessen competition” not only in Batangas but also in neighboring Cavite, Laguna and Quezon, as URC’s sugar mill is located in Balayan, Batangas while CADPI-RHI’s milling facilities are in Nasugbu town in the same province.

In an earlier statement, the commission expressed its apprehension and the parties voluntarily submitted commitments that “failed to sufficiently address the competition concerns.”

“The prohibition prevents this deal from creating a monopoly in the relevant market that could harm the welfare of the sugarcane planters,” said PCC chairman Arsenio Balisacan. “A merger-to-monopoly deal is among the most detrimental types of business transactions. The URC takeover removes its only competitor, erodes the benefits of competition for the sugarcane planters, and leaves market power at the hands of a single provider in an area.”

Investigations also showed that farmers “stand to lose the benefits” of competition due to the merger, the PCC said.

URC is engaged in food-related businesses, including packed goods, beverages and agri-industrial products while RHI operates an integrated sugarcane milling and refining plant in Batangas and is also engaged in trading raw and refined sugar and molasses.