CCP conducts search, inspection of poultry association

F.P. Report

ISLAMABAD: As part of an investigation into the alleged violation of Section 4 of the Competition Act, 2010 in the poultry sector, the Competition Commission of Pakistan (CCP), exercising its power under Section 34 of the Act, today carried out search and inspection of Pakistan Poultry Association and an undertaking in the poultry business in Lahore, for their suspected involvement in cartelization and anti-competitive activities in the poultry sector.

Two different teams of CCP entered and searched the premises of PPA and the said undertaking, where the occupiers of the premises extended full cooperation and gave access to the print and electronic record. Important information, i.e. minutes of the meetings of PPA and computer-stored information of the representatives of both PPA and the said undertaking, has been impounded, which may provide evidence about the price-fixing of day-old chick, broiler, and eggs.

The CCP took notice of a drastic increase in the prices of various poultry products, including broiler chicken, table eggs, and day-old broiler chicks and started an enquiry. The CCP noted that from March 2020 to May 2021, chicken prices experienced a rise of 110 per cent, reaching Rs.325 per kg (live chicken rate). Similarly, egg prices too saw a rising trend from March 2020 to May 2021, rising by 42 per cent, touching a peak of Rs.197.76 per dozen in December 2020.

It came to the CCP’s knowledge that PPA has been involved in the communication of egg prices. Furthermore, the appearance of different posts on social media platforms regarding the collective rates of eggs and “mutahidda” plan of action with strict adherence indicated that PPA’s platform is being used for price-fixing, which is a prima facie contravention of section 4 of the Act.

Furthermore, CCP is also probing possible collusion in the determination of prices of day-old broiler chicks, which experienced a rise of 386 per cent between March 2020 and May 2021. In March 2020, a chick was priced at Rs. 18.5, and in May 2021, the same chicks were being sold for Rs. 90 each.

The record and material impounded by the CCP teams may possibly provide evidence/proof of anti-competitive practices, including price-fixing of the day-old chicks, broiler chicken, and eggs. The impounded record may also provide evidence/proof of the possible role of the association and other undertakings in the recent hike in prices of poultry products.

It is pertinent to mention that in another recent enquiry in the poultry sector, the CCP has issued show-cause notices to 19 feed companies for cartelisation and a collective increase in feed prices, which resulted in an increase in the prices of chicken and eggs. The focus of the National Price Monitoring Committee (NPMC) meetings on essential commodity prices held under the chairmanship of the Federal Finance Minister, and stringent notice taken by the provincial government, including Punjab and Khyber Pakhtunkhwa, after the findings of CCP’s enquiry report in feed mills cartelisation has helped bring chicken broiler prices from Rs. 325 per kg to Rs. 233 per kg over the past two weeks.

The CCP is mandated under the Act to ensure free competition in all spheres of commercial and economic activity, to enhance economic efficiency and to protect consumers from anti-competitive practices, including deceptive marketing practices.