CCP investigates price fixing by eight major hatcheries

May 21, 2024 (MLN): The Competition Commission of Pakistan (CCP) conducted a hearing in the poultry cartelization case, wherein the Pakistan Poultry Association (PPA) presented its defence against allegations of price fixing.

This hearing was fixed after show cause notices were issued to PPA and eight other entities for cartelization.

The CCP's investigation revealed prima facie collusion and price fixing of day-old broiler chicks by a suspected cartel of eight hatcheries from 2019 to June 2021.

The eight entities include Hitech Group, Islamabad Group of Companies, Olympia Group, Jadeed Group, Supreme Farms (Season’s Foods), Big Bird Group, and Sabirs’ Group.

The inquiry was initiated following a surge in prices and complaints from broiler farmers through the Pakistan Citizens Portal, alleging cartelization in the sector.

Subsequently, search and inspections were conducted at the premises of PPA and forensic analysis of the evidence uncovered that an official of one of the member firms played a central role in the cartel by coordinating mutually agreed prices of day-old broiler chicks.

These rates were communicated daily to other hatcheries and PPA through SMS and WhatsApp, with pricing discussions also conducted through these mediums.

The inquiry also found PPA in prima facie violation of Section 4 of the Act, as its official was involved in the pricing discussions and announcements.

The general principle is that if price-sensitive information is being discussed, an undertaking/trade association must be seen to distance itself from collusive practices.

Most of the hatcheries involved in the suspected cartel are also vertically integrated and engaged in the entire poultry supply chain, from breeding to the production of broiler chicken including poultry feed and eggs production.

The next hearing is scheduled for 21 May 2024, where the remaining eight undertakings implicated in the case will present their stances.

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