ISLAMABAD: In a significant move to curb anti-competitive behavior, the Competition Commission of Pakistan (CCP) has imposed a hefty fine of Rs155 million on eight major poultry hatcheries involved in price fixing of day-old broiler chicks (DOCs). This decision follows an inquiry initiated by the CCP into the cartelisation practices that led to artificially inflated prices in the DOC market.
The hatcheries found guilty of collusion include prominent names such as Sadiq Poultry, Hi-Tech Group, Islamabad Group, Olympia Group, Jadeed Group, Supreme Farms (Seasons Group), Big Bird Group, and Sabir’s Group. According to the CCP’s findings, these hatcheries operated in a coordinated manner to fix prices, ultimately driving up the cost of DOCs and, consequently, chicken prices.
The cartel operated through a WhatsApp group called “Chick Rate Announcement,” where members exchanged price-sensitive information, including next-day prices, a staggering 198 times between 2019 and 2021. The group, managed by a senior official from Big Bird Group, set uniform DOC prices for Punjab, with minor adjustments for freight in Multan and Karachi. In doing so, they manipulated the market, leading to a sharp rise in DOC prices by 346% between March 2020 and April 2021, from Rs17.92 to Rs79.92 per chick.
The CCP, in its press release, stated that such practices violate Section 4 of the Competition Act 2010, which prohibits any collusive arrangements aimed at fixing prices or controlling the supply of goods. These anti-competitive activities harm market fairness and exploit consumers by artificially inflating prices.
The CCP also highlighted concerns raised by the National Price Monitoring Committee over the continuous price increases in perishable goods, particularly poultry. The Ministry of Food Security was urged to implement a price control mechanism for poultry to prevent such price manipulation.
In response to the rising DOC prices, the CCP noted that the fair market rate should be around Rs78 per chick, a far cry from the inflated prices, which have surged up to Rs230 per chick. The CCP has called for greater transparency and market competition, emphasizing that price setting should be driven by supply and demand rather than cartels. The CCP has also encouraged anyone with information about similar anti-competitive activities to come forward and file complaints via its official portal.
