LANGKAWI – Three major Langkawi Ro-Ro operators and two related enterprises have been fined for facilitating price hikes on goods entering the island after forming a price-fixing cartel.
The Malaysia Competition Commission (MyCC) in a press statement said that in its investigations, it was discovered that these five companies were involved in private discussions to increase and fix the fares, not only for commercial vehicles but also for passenger cars using their Ro-Ro vessels.
There was a Memorandum of Understanding (MoU) signed between these entities in 2018 and 2019 to fix the fares.
The instruction to investigate the matter came after numerous complaints from the public as the prices of goods and services in Langkawi had increased in 2019.
“The Domestic Trade and Consumer Affairs Ministry then conducted a research on the matter and found that the reason for the price increase was mainly due to the increased fares for commercial vehicles using Ro-Ro vessels travelling between Langkawi and Kuala Perlis and vice versa,” the statement read.
“In addition, it was found that there were similarities in the fares charged by the Ro-Ro operators. Consequently, the minister had instructed MyCC to investigate the matter.
MyCC abhors cartels as it is the supreme evil of competition law. We will not spare any parties found to be involved in a cartel. This act of economic sabotage will surely worsen the current plight of the rakyat if it goes on.
“We hope these enterprises and others out there will heed the lesson from this case,” said MyCC chief executive officer Iskandar Ismail.
The five entities involved are Langkawi Ro-Ro Ferry Services Sdn Bhd, which was fined RM810,531. Langkawi Auto Express Sdn Bhd, which is a joint venture between Dibuk and Langkawi Ferry Services, was fined RM1.13 million and Dibuk Cargo Services Sdn Bhd, was fined RM250,172.
In 2018, commercial vehicles were charged RM429 to RM1,132, while private vehicles were charged RM302 to RM429 as a result of the MoU.
This increased by more than RM100 in 2019 when commercial vehicles were charged RM540 to RM1,244. Costs for private vehicles also increased, with charges ranging from RM332 to RM534.
Deputy president of Langkawi Business Association (Niagakawi) Datuk Alexander Isaac told The Vibes that he did not agree with such consortiums and price fixing, however, the Finance Ministry should also look at how much the port authorities are charging the operators.
“I think we need to look at this issue from all sides of the spectrum. Whatever it is, the public is the one paying high taxes due to the high price of goods.
“I was not aware of the MoU signed between the five companies. However, the port is run by the subsidiary of Langkawi Development Authority, which is a government-linked company,” he told The Vibes.
The question that should also be asked is how much they are charging the operators to the point where they have to sign an agreement to fix the price. Maybe they thought the understanding which could reduce operation cost is a viable route.”
However, he stressed that there should always be free supply and demand with healthy competition among businesses.
Langkawi Tourism Industry Organisation president Ahmad Phisol Ishak, gave the thumbs up to MyCC for taking action to fine the companies. However, he believes that further investigation should be done.
Agreeing with Alex, he said that port charges also need to be seriously looked into.
“Have they increased the charges accordingly?” he asked.
Currently, MyCC has directed the enterprises to cease and refrain from engaging in price-fixing agreements that may disrupt competition in the market. They were also directed to declare their future charges for the carriage of vehicle transportation via Ro-Ro vessel.
The decision was served to the parties on December 29 last year. It will be made available for public viewing on its website soon. – The Vibes, January 5, 2022
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