‘Cartelisation': CCP imposes Rs155 million fine on poultry hatcheries
The Competition Commission of Pakistan (CCP) has imposed a collective fine of Rs155 million on eight major poultry hatcheries for 'cartelisation and price-fixing of day-old broiler chicks (DOCs)', according to its statement on Wednesday.
'The CCP took suo motu notice of cartelisation in the Day-Old Chick (DOC) market and initiated a comprehensive inquiry. The inquiry found that major hatcheries — including Sadiq Poultry, Hi-Tech Group, Islamabad Group, Olympia Group, Jadeed Group, Supreme Farms (Seasons Group), Big Bird Group, and Sabir's Group — engaged in coordinated price-fixing, in violation of Section 4 of the Competition Act, 2010,' CCP statement read.
According to the CCP, the hatcheries formed a cartel and discussed prices in a WhatsApp group called 'Chick Rate Announcement,' administered by a senior official of Big Bird Group.
'Dr Shahid, Marketing Manager Big Bird Group, coordinated the daily price updates. He sent the next day's prices every day through phone texts or WhatsApp messages to the group members.
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'Dr Abdul Karim, Chairman Hatchery Affairs Committee of the Pakistan Poultry Association (PPA), and Major (R) Syed Javaid Hussain Bukhari, Secretary General of PPA, were also part of the group.
'Group members actively discussed and shared next-day prices for approximately 198 times, in the years 2019 to 2021. The Price-Sensitive Information was exchanged 108 times via text messages and 87 times through WhatsApp,' the commission said.
The CCP further said that senior officials of the Poultry Association present in the group never stopped the sharing of price information, thereby facilitating the collusion.
'The cartel regularly announced uniform DOC rates for Punjab, and with minor freight adjustments, also influenced rates in Multan and Karachi.
'Between March 2020 and April 2021, the price of DOCs rose by 346%, from Rs17.92 to Rs79.92 per chick, contributing heavily to broiler meat price inflation.'
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According to the CCP, the Section 4 of the Competition Act, 2010 prohibits collusive arrangements to fix prices, control supply, or restrict production.
'Such practices damage competition in the market. 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.'
The CCP also noted fresh complaints that hatcheries are again engaging in collusion. Prices of day-old chicks have recently surged up to Rs230 per chick, while the fair market rate should be around Rs78 per chick.
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