Iris my case – the Malaysian flower growers’ cartel

Published On 30/07/2012 | By Tal Shmerling | Cartels

It is clear that thistle be a year in which companies operating in Malaysia will need to adapt to new ways of doing business as they prepare for a new era in competition law.

A hothouse of controversy surrounds the Cameron Highlands Floriculturist Association (CHFA), as the Malaysian Competition Commission prepares to hand down its first decision under the new legislative regime that makes it illegal to fix prices and restrict competition in Malaysia.

This new regime is the first comprehensive competition law in Malaysia and Malaysian companies have a steep learning curve ahead of them.

In a bizarre quirk, CHFA’s activities were only investigated in the first place due to a media report, quoting CHFA’s president, which openly stated that its members had agreed to increase prices by 10 per cent. CHFA has over 100 members who sell their flowers to distributors and wholesalers in Malaysia.

Sure enough, upon further investigation, CHFA’s activities did not come up smelling of roses. The Competition Commission has since notified CHFA that a “proposed decision” has been made regarding the alleged price-fixing, and the decision will become final unless CHFA is able to successfully refute the allegation.

The Competition Commission’s CEO, Shila Dorai Raj, acknowledged that a relatively “soft approach” would be taken at first, given how new the competition law is to Malaysian businesses, however she emphasized that the decision should serve as a warning to companies operating in Malaysia that price-fixing is no longer tolerated under the law.

The Commission is currently working on eight cases of possible infringement of the new regime.

Photo credit: michaelroper / Foter / CC BY-SA

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