ISLAMABAD: An inquiry by the Competition Commission of Pakistan (CCP) has found collusion and price fixing of day-old broiler chicks by Pakistan Poultry Association (PPA) as the hatcheries shared rates with competitors through SMS and WhatsApp on a daily basis.

The inquiry has reported a prima facie cartel of eight hatcheries from 2019 to June 2021.

The CCP initiated an inquiry after receiving several concerns from broiler farmers through Pakistan Citizens Portal, alleging a cartelisation in the sector behind the rising prices of day-old broiler chicks.

In this connection, the CCP conducted search and inspections on the premises of the PPA and a company involved in the sale of day-old broiler chicks in June.

Inquiry finds price collusion of PPA and eight hatcheries

A forensic analysis of the evidence impounded from these premises revealed that an official of the said hatchery played a lead role in the cartel by working as the focal person to announce mutually agreed prices of day-old broiler chicks.

Evidence available with the inquiry team shows that the rate announced after mutual discussion between the competitors is the one that actually prevails in the market and that the rate of day-old broiler chicks is the same for all hatcheries.

It has been reported that the official appointed as the focal person for coordinating rates on April 26 messaged to another hatchery “Rs82.5 for three days”.

“When checked, market information on day-old broiler chicks rates showed that the actual rate was Rs82.5 for the next three days,” the inquiry found.

It added that the PPA was also found in prima facie violation of Section 4 of the act as its official was also a part of the WhatsApp group and announcement of rates through SMS and is aware of the pricing discussions and announcements.

The report added that apparently the companies were making a collective decision on prices which culminates in the announcement of a single price by a designated official.

“This prima facie price fixing arrangement between competitors clearly violates Section 4 of the Competition Act 2010,” the inquiry report said.

It is observed that month-wise average day-old broiler chick prices fluctuated widely during the year (2020-21) between the range of Rs20.46 to Rs79.74 per chick, and the share of day-old broiler chicks in total cost changed accordingly.

Published in Dawn, December 10th, 2021