Price Fixing

[pnustedt]

We have a contract farming business and my wife is getting pressure from our competitors to fix the price of rice harvesting - somewhat higher than the price which I am inclined to charge. Does anyone know if it is legal for a group of businesses to fix prices like this in Thailand? It seems to be happening quite openly.

[stateman]

We have a contract farming business and my wife is getting pressure from our competitors to fix the price of rice harvesting - somewhat higher than the price which I am inclined to charge. Does anyone know if it is legal for a group of businesses to fix prices like this in Thailand? It seems to be happening quite openly.

Haven't heard that between merchants it was illegal.

I am sure it is practiced all the time, although normally it is done among Thais/Chinese - not with a farang. Heard that years ago, the big boss of Bangkok Bank would be playing mah-jong with other tycoons; and during the game he would ask what price we would pay for a certain commodity - say rice. Once agreed, that would be the price they all pay to the poor peasants.

I am not clear what it means for setting a higher price in this case. Does it mean you can sell you rice at a higher price?

On one hand I root for the farmers to get the best price they can, rather than get squeezed year after year by the merchants and fall deeper into debt.

On the other hand, I also feel for you that if you don't cooperate with those businessmen, who tend to be influential and may very well be connected to the dark power. Your safety and well being may be at risk if you play the wrong card.

Wish you well.

[stateman]

We have a contract farming business and my wife is getting pressure from our competitors to fix the price of rice harvesting - somewhat higher than the price which I am inclined to charge. Does anyone know if it is legal for a group of businesses to fix prices like this in Thailand? It seems to be happening quite openly.

BTW price fixing amount bidders of a gov project IS illegal subjected to a stiff jail term.

Back to your case, they just finished the new constitution. Many daughter laws still need to be written. I haven't heard any law covering merchants price fixing. In the country most powers-that-be are big business people who protect their benefit fiercely, I won't be surprise if a law that will screw themselves up won't see the light of day.

[pnustedt]

I am not clear what it means for setting a higher price in this case. Does it mean you can sell you rice at a higher price?

I am referring to the price per rai to harvest the rice for land owners. They then sell their rice.

I doubt that personal safety would be at risk but sabotage could be a possibility - e.g. the placing of steel rods in the rice fields could damage the harvesters.

[lannarebirth]

Price fixing, collusion, monopolistic practices are illegal in Thailand with a law in place forbidding it. The law has some areas of commerce exempt from the law and it is also very poorly enforced.

http://www.apeccp.org.tw/doc/Workshop/w1999/002th.html

[torrenova]

We have a contract farming business and my wife is getting pressure from our competitors to fix the price of rice harvesting - somewhat higher than the price which I am inclined to charge. Does anyone know if it is legal for a group of businesses to fix prices like this in Thailand? It seems to be happening quite openly.

Do you mean that say your people will harvest rice for Bt100 per rai and your competitors want you to agree a minimum price of Bt120 per rai ? You pay your people the same and you pocket an extra Bt20 per rai ?

[madjbs]

It’s called a cartel, same as a drugs cartel but this time with rice harvesting If they all charge the same price then people will have no choice but to pay that price as the rice needs harvesting whatever happens. If they happen to all agree to set the price higher than the market price then it’s a cartel and illegal.

[torrenova]

But maybe not illegal in LOS and probably certainly "legal" in the rural village communities.

[madjbs]

Certainly illegal, perhaps it’s ignored but its still an example of exploiting the consumer and in this case farmers, who have a hard enough time already. Also the problem is that the other harvesting firms may seek revenge if you don’t co-operate (depending on how many dirty practices they are willing to use to get money) as obviously they will be forced to match your price which they may see as you taking potential money out of their pocket.

Edited November 2, 2007 by madjbs

[ronigere]

Certainly illegal, perhaps it’s ignored but its still an example of exploiting the consumer and in this case farmers, who have a hard enough time already. Also the problem is that the other harvesting firms may seek revenge if you don’t co-operate (depending on how many dirty practices they are willing to use to get money) as obviously they will be forced to match your price which they may see as you taking potential money out of their pocket.