Kuala Lumpur: The Malaysia Competition Commission (MyCC) has fined five companies a total of RM415 million for forming a “chicken feed cartel” to fix prices.
MyCC CEO Iskandar Ismail said the firms were alleged to have agreed to raise the price of poultry feed, which then distorted chicken prices.
Investigations found that the five companies, the country’s biggest chicken feed producers, violated the Competition Act by having an agreement between them with the goal or effect of “preventing, restricting or distorting competition” in any market for goods or services.
The five companies are Dindings Poultry Development Centre Sdn Bhd, FFM Bhd, Gold Coin Feedmills (Malaysia) Sdn Bhd, Leong Hup Feedmill Malaysia Sdn Bhd, and PK Agro-Industrial Products (M) Sdn Bhd.
“We have issued a final decision against the five companies for breaching Section 4 of the Competition Act 2010 through the formation of a chicken feed pricing cartel.
“Cartels are a supreme evil in competition law. Therefore, we act decisively to tackle issues like this. It is economic sabotage against all consumers,” he said at a press conference.
Iskandar said it was MyCC’s biggest fine to date.
According to Iskandar, the cost of chicken feed represents 72.8% of the total cost for chicken production compared with other factors, such as day-old-chicks (21%), manpower (2.6%), transportation (1.7%), vaccine/vitamin (1.0%), and utilities such as water and electricity (0.9%).
“Based on our investigation, there are 29 feedmill companies, of which these five companies control 40% of the market,” he said.
He said the companies would raise the price of chicken feed by RM1 to RM2 per 50kg, either simultaneously or within a week of each other.
Dindings Poultry was fined RM70,023,622.35, followed by FFM Bhd (RM42,689,583) Gold Coin Feedmills (RM97,511,670) Leong Hup Feedmill (RM157,470,027), and PK Agro-Industrial (RM47,800,793).
On top of the fine, MyCC also issued a cease and desist order instructing the companies to cease participation in the chicken feed cartel.
The companies may appeal to the Competition Appeal Tribunal, Iskandar said.
On Oct 24, former prime minister Ismail Sabri Yaakob Ismail asked the government to explain the outcome of the MyCC action against the companies accused of forming a “chicken cartel” to fix the price of chicken.
Previously, it was reported that MyCC would announce its decision in the case by the third quarter of 2023.
