May 11, 2021
Poultry feed companies in Pakistan found involved in price fixing
The Competition Commission of Pakistan (CCP) has disclosed last week that 19 poultry feed companies were involved in price coordination, leading to multiple increases in prices of chicken and eggs.
The commission took notice of concerns and complaints alleging that some of the leading mills had colluded to raise poultry feed prices. Complainants include poultry farmers whose businesses were hit by costly feed prices.
The CCP inquiry revealed that between December 2018 and December 2020, the feed mills raise poultry feed prices by Rs825 (US$5.41) per 50kg bag which made feed 32% costlier for poultry farmers.
The inquiry also obtained data for September 2020 which showed an increase in chicken prices by 18.31% and eggs by 5.2%. The rise in these prices coincided with an increase in feed prices by almost Rs100 (US$0.66) per bag.
Multiple instances of dubious price increases in poultry feed were seen last year - October, November and December - leading to increased prices of chicken and eggs.
Last February, CCP raided two major poultry feed producers and impounded crucial evidence pointing towards price change coordination among feed companies.
It was found that mills had carried out price changes between December 2018 and December 2020 in a coordinated manner and in short intervals.
The inquiry also noted that key poultry input costs shows corn, which is the primary component of feeds, constituting 55-60% in terms of physical usage in feed - approximately 40% of cost.
- Dawn