A new player in the canned tuna industry has complained about the practice of a big company in employing the so-called voluntary loyalty program (VLP) as a tool to retain the latter’s “perpetual monopoly” over the domestic canned tuna market.

In a letter submitted to Trade and Industry Secretary Peter Favila on 04 January 2010, Foodsphere Inc., manufacturer of a new product called San Marino Corned Tuna, said it has in possession evidence that Century Pacific Group was promoting voluntary loyalty program (VLP), a scheme that involves rewarding incentives to dealers and retailers that sell Century Tuna products only, to the exclusion of other brands.

The letter was actually a follow up to the first letter it sent to the DTI on 03 November 2009, wherein it appealed to the agency to protect the interests of the Filipino consumers and the general welfare of the trade, by acting against monopoly and unfair trade practices committed by Century Pacific Group.

Lawyer Raymond Fortun, legal counsel of Foodsphere, said the discovery of voluntary loyalty (VLP) program scheme by Century Pacific Group, the dominant canned tuna manufacturer, will strengthen its case against the dominant canned tuna producer, which is accused of committing unfair trade practices such as blocking the entry of San Marino Corned Tuna into retail outlets where the latter has been the exclusive canned tuna brand for many years.

Century Pacific Group is the maker of Century, 555, Blue Bay and Fresca canned tuna brands, with a combined share of 99 percent of the PhP6-billion local canned tuna market.

“This scheme, which we consider as the mother of all commercial scandals, involves offering incentives to retailers that sell only a particular product brand exclusively, while disallowing other brands,” Fortun said.

“In effect, it frustrates the efforts of businesses to provide the Filipino consumers with a wider option that will cater to their taste and needs.

More importantly, this scheme is an insult to the ability of the government to prohibit monopoly, as it is mandated to do by the Constitution,” he added.

Citing accounts of people privy to the disagreeable commercial arrangement dangled by Century Pacific to dealers and retailers, Fortun said these retail outlets are made to sign contracts, which he said is designed to ensure the perpetual monopoly of Century Pacific over the canned tuna sector.

A copy of a voluntary loyalty program signed by a dealer based in Central Luzon shows that Century Pacific was trying to offer its dealers with "loyalty incentives," if they would refuse to sell other canned tuna brands, such as San Marino Corned Tuna.

A part of such loyalty incentive agreement reads: "In view of the dealer's commitment to exclusively sell the products at his store, Century Canning Corp. has decided to further provide support to the dealer through an additional incentive through the issuance of a credit memo in favor of the dealer."

Century Canning Corp. is a manufacturing unit of the Century Pacific Group.

"It is understood by the dealer that Century Canning Corp. has provided the incentive/rebate on the basis that the dealer has voluntarily agreed to exclusively sell the products to the exclusion of all other canned tuna products at his/her outlet," it further stated.