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Five feed millers identified for possible cartel conduct

Early investigation reports show that the five have shared sensitive commercial information that could distort competition in the market

by FAYYADH JAAFAR / pic BERNAMA

PRELIMINARY findings of the Malaysia Competition Commission (MyCC) shown that five feed millers have been engaged in anti-competitive practices.

They are Dindings Poultry Development Centre Sdn Bhd, FFM Bhd, Gold Coin Feedmills (M) Sdn Bhd, Leong Hup Feedmill Malaysia Sdn Bhd and PK Agro-Industrial Products (M) Sdn Bhd.

According to the findings, MyCC’s special task force has uncovered that these five feed millers have potentially breached Section 4 of the Competition Act 2010 by entering into anti-competitive agreements and/or concerted practises in increasing the price quantum of poultry feed that contains soybean meal and maize as its main ingredients between early 2020 and mid-2022.

Early investigations showed that the sensitive commercial information shared between the five feed millers is seen to potentially distort competition in the market.

By adjusting prices at the same quantum, which results in similar increments among the enterprises, the customers’ options in choosing their preferred poultry feed supplier that offers the best value may be restricted.

Therefore, the conduct of the said enterprises can potentially lead to an anti-competitive landscape in the supply chain of the poultry industry.

MyCC CEO Iskandar Ismail said the commission’s findings are provisional and it should not be assumed that any enterprise has broken the law at this stage.

He added that the five feed millers will now have the opportunity to submit their representation within 30 days from the date of service of the proposed decision.

They may opt to present their representation orally on a date that will be determined upon receiving their written submissions.

Upon hearing and considering the representations together with the evidence gathered during the investigation, MyCC will then issue its final decision on whether there is a finding of infringement or non-infringement of the Competition Act 2010.

The finding of an infringement will allow MyCC to impose a financial penalty of up to 10% of the parties’ worldwide turnover during the period of infringement.

On top of the penalty, MyCC has the discretion to impose any other appropriate directives that it sees fit.

“It is crystal clear that under the Competition Act 2010, enterprises should not enter into any agreement, exchange commercially sensitive information on prices or engage in any concerted practices to prevent, restrict or distort competition.

“They should, instead, independently determine their respective conduct and facilitate a competitive landscape in the market,” Iskandar said at a press conference today.

He added that anti-competitive agreements, also known as cartel agreements, cause significant damage to the economy as well as to consumers at large.

“Cartelism is the supreme evil of competition. The fight against the cartel is not over, and we need all hands-on deck in this fight.

“We invite the public to work together with MyCC in bringing cartel conduct to light,” he said.

Poultry feed, according to MYCC, is a major contributor to the cost of poultry farming, accounting for approximately 72.8% of the total cost.

Therefore, if competition is distorted in the poultry feed market, the entire supply chain in the industry will be affected, especially consumers, who are at the end of that supply chain.

“MyCC reaffirms its commitment to ensuring that justice is not only served but also seen to be served.

“The public and members of the media are urged to let the law take its course and lay all speculation to rest,” Iskandar concluded.

Zukri

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