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CCP slaps Rs155m fine on major poultry hatcheries over cartelisation

In the light of cartelisation and price fixing of day-old broiler chicks (DOCs), the Competition Commission of Pakistan (CCP) slapped a collective fine of Rs155 million on eight major poultry hatcheries, said a CCP press release on Wednesday.

Last week, the National Price Monitoring Committee showed concerns over the rising trend in perishable products, directing the Ministry of Food Security to develop a price control mechanism for poultry.

The CCP took suo motu notice of cartelisation in the DOC market, initiating an inquiry which found that eight major hatcheries were engaged in a coordinated effort to fix their prices.

The CCP named the following hatcheries: Sadiq Poultry, Hi-Tech Group, Islamabad Group, Olympia Group, Jadeed Group, Supreme Farms (Seasons Group), Big Bird Group, and Sabir’s Group.

Detailing the mode of operation of the cartel, the CCP noted that the hatcheries discussed the prices in a WhatsApp group titled “Chick Rate Announcement.” The group was administered by a senior Big Bird group official, while the Marketing Manager of Big Bird Group, Dr Shahid, coordinated the daily price updates.

It further noted that the cartel regularly announced uniform DOC rates for Punjab. With minor freight adjustments, it also influenced rates in Multan and Karachi.

It was pointed out that the group members discussed and shared next-day prices approximately 198 times from 2019 to 2021. The Price-Sensitive Information was exchanged 108 times via text messages and 87 times through WhatsApp, the CCP further noted.

The CCP observed that between March 2020 and April 2021, the price of DOCs rose by 346 per cent, from Rs17.92 to Rs79.92 per chick, contributing to inflated chicken prices.

Pakistan Poultry Association (PPA) Hatchery Affairs Committee Chairman Abdul Karim, PPA Secretary retired General Major Syed Javaid Hussain Bukhari, along with other senior officials from the PPA were also present in the WhatsApp group.

As per the CCP, the eight groups are in direct violation of Section 4 of the Competition Act 2010, which prohibits collusive arrangements to fix prices, control supply, or restrict production.

The CCP commented that such practices damage competition in the market and drive up food prices, calling it a shameful exploitation of society.

“Trade associations are meant to help develop their sectors, not to share price-sensitive information or facilitate cartelisation. Price-fixing through associations is a serious market distortion and an exploitation of consumers. Prices must be determined by free demand and supply forces,” said the press release.

Citing fresh complaints of price hikes, the CCP highlighted that the fair market rate of DOCs should be around Rs78 per chick as opposed to the recent price surge of up to Rs230 per chick.

The CCP encouraged anyone aware of anti-competitive activities by trade associations to file a complaint via the CCP’s complaint portal.



from The Dawn News - Home https://ift.tt/SXzmpea
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