CCP issues show-cause notice to poultry feed mills cartelization
ISLAMABAD (PR): The Competition Commission of Pakistan (CCP) has issued show cause notices to 19 poultry feed mills for engaging in cartelization, collusion, mutual collusion and violation of Section 4 of the Competition Act. This is on alleged Poultry feed mills cartelization.
Inquiry on Poultry feed mills cartelization
The CCP had initiated an inquiry into alleged anti-competitive activities in the poultry feed sector by taking suo motu notice after receiving complaints of increase in poultry feed prices. According to the CCP’s inquiry, between December 2018 and December 2020, feed mills colluded with each other to increase poultry feed prices by an average of Rs 825 per 50 kg bag, i.e. 32 percent.
Moreover, Pakistan Bureau of Statistics data for September 2020 shows that chicken prices increased by 18.31 percent and egg prices by 5.2 percent. This increase was accompanied by an increase in poultry feed prices of Rs. 100 per bag. After another increase by poultry feed mills in October 2020 (i.e. increase in layer feed by Rs. 125 per 50 kg bag and broiler feed by Rs. 175 per 50 kg bag), chicken prices increased by 26.62 percent and egg prices by 23.81 percent.
In November 2020, poultry feed prices increased again by Rs. 150 per 50 kg bag, after which chicken and egg prices increased by 20.76 percent and 5.23 percent respectively. In December 2020, poultry feed prices increased by Rs 250 per 50 kg bag, after which the prices of chicken and eggs increased by 3.21% and 14.08% respectively.
Inspection of Feed Mills
For these reasons, the CCP had searched and inspected the offices of two major poultry feed mills in Lahore and Rawalpindi in February this year and seized important records. The seized records revealed that officials of 19 feed mills were using an active WhatsApp group where one feed producer would announce a price increase to a certain extent and all the other officials would express their consent to follow it.
The price discussions included not only the prevailing date of the increase but also the amount of the price increase. The discussions and decisions of the WhatsApp group of these 19 feed mills were regularly implemented, as evidenced by the official price lists of the companies.
The Commission also found that there was a systematic price fixing between December 2018 and December 2020. Therefore, the feed mills have been issued a show cause notice and asked to respond within 14 days.
Violation of Seciton 4 and Poultry feed mills cartelization
It is worth mentioning here that for violation of Section 4 of the Competition Act, the association can be fined up to Rs. 75 million or 10% of the annual turnover or Rs. 75 million. Companies against whom legal proceedings are underway can compete for a reduction in the fine or complete remission under the CCP Leniency Regulations, provided that they provide additional material information on the pending matter to the CCP and the CCP accepts it.
The Competition Commission of Pakistan (CCP) is empowered under the Competition Act to enable competition in all economic and commercial activities and to take measures to protect consumers from anti-competitive activities.
The names of the feed mills to which notices have been issued include: National Feed, Supreme Feed, Asia Poultry Feed, Zubair Feed, SB Feed (Fajr Feed), Sadiq Feed, Jadid Feed, Islam Feed, Hi-Tech Feed, Sharif Feed, Mukhtar Poultry Feed, Multan Feed, SS Feed, Mahmood Feed, Kausar Feed, Qadri Nagar & Industries, Sun Crop Group Feed Division, Raical Feed and Al Waris Industries.
مبینہ پولٹری کارٹل اور جمشید اقبال چیمہ ۔۔ مضامینِ نو، ڈاکٹر محمد جاسر آفتاب
