MONOPOLY

Fortune tobacco and Philip Morris have agreed to merge as one company to control 90% of the tobacco and it will be called Philip Morris - fortune Tobacco Corporation. The market sharing of these 2 corporations used to be at 28 for Philip Morris which caters to the high end market while fortune tobacco which targets mostly the low end market gets 60%.

An industry to be healthy should have a lot of players involved. 2 competing corporations were already not so healthy how much worse it can be if it has merged to one. The tobacco product was in itself unhealthy they have even made it more unpalatable when they merged together to monopolize.

The Philippines is so accustomed to monopolized industries. Our petroleum industry is practically controlled by just 3 major players. They maybe different corporations but they agree altogether in pricing. They are working similar to a cartel.

A cartel is a combination of independent business organizations formed to regulate production, pricing, and marketing of goods by the members.

In the Philippine capital alone, the current provider for electricity is just single corporation. It practically controls the price of electricity and the government has little control over it.

The telecommunication industry is controlled by just 3 major players as well. Water distribution is also controlled by just 2 companies.

The purpose of a cartel is to synergize. Synergy is a good thing if they are doing it for one purpose and that is to bring together their resources to produce a better product. It is best applied to small medium enterprises that don't have so much resource to compete with big companies. A classic example of this system is the cooperative. A cooperative is relating to or formed as an enterprise or organization jointly owned or managed by those who use its facilities or services. This involves individuals who don't have the capacity to invest in large scale investment in the stock exchange but have little resource to get together and start a business.

The mistake of having a cartel is when big business band together to manipulate the market. The country has often experienced being held hostage by these large cartels so that the government would just give in to whatever demand they want. It is mostly pricing. Well, what are we in business for if not for profit as the adage goes

United States antitrust law is the body of laws that prohibits anti-competitive behavior (monopoly) and unfair business practices. Antitrust laws are designed to encourage competition in the marketplace. These competition laws make illegal certain practices deemed to hurt businesses or consumers or both, or generally to violate standards of ethical behavior. Government agencies known as competition regulators, along with private litigants, apply the antitrust and consumer protection laws in hopes of preventing market failure. The term "antitrust" was originally formulated to combat "business trusts", now more commonly known as cartels. Other countries use the term "competition law". Many countries including most of the Western world have antitrust laws of some form; for example the European Union has provisions under the Treaty of Rome to maintain fair competition, as does Australia under its Trade Practices Act 1974.

To the upcoming government, whoever wins this election come May 2010, let it be known that to better lift up the standard of business in this country, the government should have a strong hand against monopoly and instead support the small enterprises, get them together, provide new technology, open small loan facilities and offer basic financial and management training to would be businessmen. But if we still retain the same policy with regard to cartel, you will just see that the Philippines will still be controlled by just 10 or 20 families and the rest of the people are just dummies.