CCP considers launching probe against poultry sector

Published May 13, 2021
The investigation will examine whether a collusion between poultry companies and the Pakistan Poultry Association (PPA) led to the unusual rise in prices. ─ AFP/File
The investigation will examine whether a collusion between poultry companies and the Pakistan Poultry Association (PPA) led to the unusual rise in prices. ─ AFP/File

ISLAMABAD: With prices of chicken meat surging to a new high, the Competition Commission of Pakistan (CCP) is considering the launch of an investigation against the poultry sector.

The investigation will examine whether a collusion between poultry companies and the Pakistan Poultry Association (PPA) led to the unusual rise in prices.

Informed sources told Dawn that senior officials of the Competition Commission held consultations online after receiving a large number of complaints about the consistent rise in prices of chicken and eggs. They took a decision, in principle, to initiate a probe against the poultry sector.

The CCP has recently completed an inquiry into the workings of poultry feed sector. The inquiry found that the feed mills were sharing sensitive business information that suppressed open competition in the market.

According to sources, the CCP meeting noted that the prices of chicken and eggs had hit the roof and a probe may begin after the Eid holiday.

The rates for live chicken were hovering around Rs350 per kilogram and chicken meat sold for Rs500 per kg across the country on Wednesday. As if this were not enough, sellers were heard warning buyers that the prices could shoot up further in the wake of short supplies.

In 2010, the CCP had imposed a penalty of Rs 50 million on the Pakistan Poultry Association and in 2016, Rs 100m for cartelisation.

The CCP’s recent inquiry into the poultry feed companies’ cartelisation has exposed the malpractice that led to the rise in chicken and egg prices.

The report pointed to the involvement of some influential groups in collusive practices and undue profiteering that caused the unprecedented price hike.

Sources said if the charges of cartelisation under Section 4 of the Competition Act, 2010, were proven against these companies, the imposition of penalties totaling billions of rupees could follow. The CCP can impose a penalty of 10 percent on an annual turnover of Rs75m.

A number of CCP officials informed the meeting that prices of poultry products have been rising relentlessly since December.

The prices of chicken meat stood at Rs 258 per kg last month while it was Rs 141 in the same month last year — an over 80 percent increase.

The price of egg was Rs163 per dozen last month, as compared to Rs111 the same month last year — an almost 50 percent increase.

Smartphones seized

Sources in the Commission told Dawn that the recent CCP’s inquiry report had revealed that during a raid on the premises of two poultry firms, smartphones of some individuals working for these organizations were impounded along with other documents.

The forensic analysis of the information obtained from the smartphone of an individual belonging to National Feeds revealed the presence of a WhatsApp group, All GMs Feeds Mills, created by him on Oct 7 last year.

The members of this group, as the name suggests, comprised marketing managers of a number of feed mills. The CCP sought verification of the information about the Whatsapp group from the Pakistan Tele­communication Authority (PTA).

The group has in its fold some big names in the business — GMNational Feeds (group creator), Supreme Feeds, Asia Poultry Feeds, Zubair Feeds (brand name Avian Feeds), SB Feeds (brand name Fajr Feeds), Sadiq Feeds, Jadeed Feeds (three employees are members of the group), Islamabad Feeds, Mukhtar Feeds, Hi-tech Feeds, Sharif Feeds, Sabir’s Group (represented by Multan Feeds), SS Feeds, Mahmood Feeds, Kausar Feeds, Qadir Feeds, Suncrop, Royal Feeds, and Al-waris Industries (Star Feeds).

This group was created on Oct 7, just one or two days after a round of price increases took place. The group was apparently created for sharing of information. Furthermore, the official price lists submitted by feed mills provide evidence that the price changes discussed in the WhatsApp forum were implemented simultaneously by the feed mills participating in the group.

A pattern emerges whereby price changes by feed mill members of the WhatsApp group occurred either on the same day or the next day.

The WhatsApp discussion thread dated Nov 14 to 19 regarding price increases was implemented by the companies either on Nov 14 or Nov 16.

Likewise, the price increases discussed on Dec 7 were implemented either on the same day or the next. The inquiry report has mentioned the actual dates of price increases by these groups.

Sources in the commission believe that not only was the timing of the price increase coordinated, but the exact quantum of the increase was also coordinated.

The price increase enacted from Nov 14 to 16 were across the board at Rs 150 per 50kg bag.

On Dec 7 and 8, prices rose across the board on all feed types by Rs. 250 for a 50kg bag.

Asia Poultry Feeds, Zubair Feeds, Fajr Feeds (SB Feeds), Islamabad Feed, Jadeed Feed Industries, National Feeds, Sadiq Feeds, SS Feed Mills, Supreme Feeds, Mahmood Feeds, Hi-tech Feeds, Qadir Feeds, and Suncrop, increased the price per bag by Rs150 in November and Rs 250 in December.

Mukhtar Poultry Feeds raised the price from Rs 150 in November to Rs 268 in December and Sharif Feeds Mills from Rs67 to Rs269.

From Dec 2018 to Dec 2020, there were 11 instances where poultry feed prices were changed either on the same day or within a few days of each other.

This collusion caused prices of 50 kg bag of feed to shoot up by Rs 825 — a 32 percent hike from Dec 2018 to Dec 2020.

Published in Dawn, May 13th, 2021

Opinion

Between boom and bust
Updated 24 Jun 2021

Between boom and bust

Ultimately the budget, and its aim to pump growth, will be left standing on two legs only — free oil and free dollars from abroad.
Judging without law
Updated 24 Jun 2021

Judging without law

The Supreme Court has yet to formulate a detailed procedure to conduct cases having far-reaching impacts on people’s lives.
Cold war II
23 Jun 2021

Cold war II

China and the West must find a better way.

Editorial

PM on Afghanistan
Updated 24 Jun 2021

PM on Afghanistan

Points raised by PM need to be pondered by all sides — specifically Afghan govt and Taliban — if a civil war is to be avoided.
24 Jun 2021

Third-party interest

WHAT should be done when third-party interest has been created where construction has been done illegally? It is an...
24 Jun 2021

Electricity policy

THE Council of Common Interests has unanimously approved the National Electricity Policy 2021 that will focus on...
PM’s views on rape
Updated 23 Jun 2021

PM’s views on rape

Rape is a crime primarily of power rather than lust, rooted in a contempt for others’ bodily integrity.
23 Jun 2021

Gas concerns

CONSUMERS face the prospect of ominous blackouts next month owing to the closure of two gas fields in Sindh, the ...
23 Jun 2021

New Iranian president

SAYYID Ebrahim Raisi, Iran’s new president, is taking over at a time of great geopolitical flux, while the Islamic...