PCC approves MPIC unit’s acquisition of Franklin Baker

MANILA, Philippines — The Philippine Competition Commission (PCC) has cleared the acquisition of Franklin Baker Co. of the Philippines by Metro Pacific Investments Corp. through subsidiary Metro Pacific Agro Ventures Inc. (MPAV).

In a statement yesterday, the antitrust agency said it approved MPAV’s acquisition of Franklin Baker as the “transaction is unlikely to result in a substantial lessening of competition in the relevant markets.”

The approval was given following a Phase 2 review or a more detailed and extensive assessment.

The transaction entered Phase 2 review amid initial concerns about potential monopsony effects in raw coconut sourcing, wherein a single buyer effectively controls the market.

MPAV’s plan to buy out Franklin Baker was first reported by The STAR.

MPAV is engaged in the production, processing and distribution of dairy, fresh produce as well as coconut?based products.

It also manufactures coconut products for the domestic market and exports, with a coconut production facility through its affiliate Axelum Resources Corp.

Meanwhile, Franklin Baker manufactures and exports desiccated coconut, coconut water, coconut cream and coconut milk.

It has production facilities in San Pablo, Laguna and Santa Cruz, Davao del Sur.

The PCC said it found that the production of desiccated coconut, coconut water, coconut cream and coconut milk is global in scope with numerous competing suppliers.

As such, the ability or incentive for the parties to hike prices or reduce product quality is limited.

As for initial monopsony concerns in the procurement of mature raw coconuts in Mindanao where the parties’ suppliers are located, the PCC said copra manufacturers remain the largest buyers and absorb a substantial share of supply.

This ensures that coconut farmers continue to have multiple outlets for their produce.

The PCC said the approval shows the antitrust agency’s commitment to ensuring that consolidation in the agri?food sector would not harm competition.

“The Commission remains steadfast in safeguarding consumer welfare and promoting a level playing field across both domestic and global markets,” the PCC said.