LETTER TO THE EDITOR

Source: BusinessWorld (November 14, 2011)

The BusinessWorld edition of Oct.31, 2011 carried a report headlined "Nestlé officials accused of price fixing", which we would like to address with your kind permission.

The report, which was apparently based on a resolution by the Quezon City Prosecutor's Office dated Aug.15,2011, said: "A city prosecutor's office has found probable cause to charge Nestlé Philippines, Inc. officials with price fixing after distributors complained that the local arm of the food giant required their prodcuts to be sold for a dictated cost."

Apparently, the reporter was not aware that in a subsequent resolution on the same matter dated Oct. 5, 2011, the Quezon City Prosecutor's Office dismissed compalints against officers of Nestlé Philippines, Inc. (NPI) for alleged predatory pricing in violation of Article 186 of the Revised Penal Code. The complaints were filed by Service Edge Distribution, Inc. (SEDI) and FDI Forefront II Trading (FDI), both former distributors of NPI.

In its resolution of Oct.5, the Quezon City Prosecutor's Office reversed its earlier resolution approving the filing of charges in the Quezon City Regional Trial Court. Subsequently, the Quezon City Prosecutor's Office also filed a motion to withdraw from the Quezon City Regional Trial Court all relevant charges on predatory pricing in connection with the case.

The OCt.5 resolution states, "... a cursory reading of the complainant's allegations would readily show that there is no crime commited as the vertical price restraint practice is freely accepted in this jurisdiction as a tool for commerce."

Similar criminal cases filed by the same parties with the Makati and Quezon City Prosecutor's Offices, and an administrative case at the Department of Trade and Industry, have already been dismissed.

We hope that our letter will be useful in providing readers with updated information and correcting any misunderstanding which may have arisen from the report.

Sincerely,

RUSSEL ANDAYA
Senior Vice-President, Head of Legal
Nestlé Philippines, Inc.