SC upholds legality of anti-profiteering provision

Supreme Court. INQUIRER FILE PHOTO

The Supreme Court has affirmed the constitutionality of the provision prohibiting profiteering under Republic Act No. 7581, or The Price Act.

In a 25-page decision, the high tribunal dismissed the petition of Universal Robina Corp. (URC) seeking the reversal of a 2012 lower court ruling that denied URC’s petition for declaratory relief “for failing to show the invalidity of the laws and executive issuances it assails, and for being premature.”

The URC had asked that the provision in the Price Act prohibiting profiteering be declared as invalid, stressing that the definition of profiteering “is void for vagueness and violates the constitutional right of an accused to be informed of the nature and cause of an accusation against them.”

The case stemmed from profiteering charges filed by Victorio Mario Dimagiba, then Bureau of Trade and Regulation and Consumer Protection director, against URC and other local flour millers in 2010 before the Department of Trade and Industry (DTI).

Before filing the complaint, Dimagiba sent letters to the companies involved asking why their ex-mill flour prices had not been reduced despite the drop in the price of wheat in the world market, freight cost, foreign exchange rate and the imposition of zero tariff.

The Gokongwei-led company responded that “the difference in the price of our flour bag within a span of three years reflects the price movement of wheat in the world market and covers our other costs of operation, which involve increases in our labor costs.”

Dimagiba reminded the URC that wheat prices in the international market from January to September 2007 on one hand, and from January to May 2010, on the other, were almost the same despite the retail and ex-mill prices in 2007 being lower than those in 2010.

In his complaint before the DTI, Dimagiba alleged that URC’s flour price at P790 per bag constituted profiteering under RA 7581, or the Price Act, for not representing the true worth of the flour per bag. He asked that URC be fined and ordered to sell the product from P630 to P680 per bag. INQ