October 29, 2010

Pakistani commission issues notices to two poultry firms

The Competition Commission of Pakistan (CCP) has issued Show Cause Notices to two poultry parent stock companies for prima facie engaging in collusion and cartelisation in violation of Section 4 of Competition Act 2010 (the 'Act').

The two companies are Grand Parent Poultry (Pvt) Ltd and Quality Poultry Breeders (Pvt) Ltd. The companies have been asked to submit their written arguments within 15 days, and to appear before the Commission on November 25, 2010 for oral arguments. Both companies are members of Pakistan Poultry Association (PPA).

These Show Cause Notices come in the aftermath of the recent PKR50 million (US$580,000) fine imposed by CCP on the PPA for cartelising the poultry industry and the show cause notices issued two days ago to 18 feed mills over similar violations.

Earlier the CCP's investigation had found PPA, its members and some poultry companies in prima facie violation of the Act. In its Show Cause Notices, the CCP has stated that based on its prima facie findings, the poultry parent stock companies appear to have entered into an agreement amongst themselves and with other PPA members with regards to pricing, production and sale of poultry parent stock which prima facie violates Section 4 of the Act.

Since the passage of the Act on 06-10-2010, the Commission has geared up its efforts to promote competition in the economy and to protect consumers from anti-competitive behaviour including collusion and cartelisation. Inter alia, collusion and cartelisation can raise prices, restrict production and reduces consumer choice thereby distorting competition.