MyCC imposes RM415.5m penalty on poultry feed cartel

The Malaysia Competition Commission (MyCC) has imposed a penalty of nearly RM415.5 million against five poultry feed manufacturers for infringing Section 4 of the Competition Act 2010 (Act 712) by forming a price-fixing cartel.

In a statement today, MyCC named the companies as Leong Hup Feedmill (M) Sdn Bhd (Leong Hup), FFM Berhad (FFM), Gold Coin Feedmills (M) Sdn Bhd (Gold Coin), Dindings Poultry Development Centre Sdn Bhd (Dindings) and PK Agro-Industrial Products (M) Sdn Bhd (PK Agro).

“Investigation by MyCC between January 2020 and March 2022 unravelled the distortion in the poultry feed market with multiple evidence in the form of price announcements, pricing patterns and communication among the enterprises,” said the statement.

MyCC said its investigation uncovered evidence of identical increments in poultry feed prices among the parties from January 2020 to June 2022, in addition to finding that the five enterprises had employed a calculated strategy to create the illusion of rising poultry feed costs due to hikes in raw material costs.

It added that WhatsApp chats and call logs recovered during the investigation correlated significantly with the dates of the price announcements, which strengthened the case for a connection between communication practices and pricing decisions.

FFM was imposed with a penalty of RM42.69 million, Gold Coin (RM97.51 million), Leong Hup (RM157.47 million), PK Agro (RM47.8 million) and Dindings (RM70.02 million).

Cease and desist

In addition to the penalties, MyCC also issued a cease and desist order, urging the companies to stop participating with the poultry feed cartel and submit a monthly report on the fluctuations of poultry feed prices.

FFM, Gold Coin and Dindings are required to review and enhance their competition law compliance training programmes and enrol their employees and board members in the same, said MyCC.

According to the statement, PK Agro and Leong Hup are required to implement competition law compliance programmes by enrolling employees and board members in the same.

“The enterprises are also required to include a provision in their respective codes of conduct to recognise the involvement in Competition Law infringements as misconduct,” it said.

”Cartels are a supreme evil in competition law and a form of economic sabotage at the highest level, more so in a public interest case,” said MyCC chief executive officer Iskandar Ismail.

“We will continue to monitor the poultry industry without fear or favour to eradicate cartels, particularly after the government’s recent decision to discontinue subsidies and price control on chicken,” said Iskandar.

“We hope the lesson learned from this case will be a deterrent to all, in particular cartels-to-be,” he added.

- Bernama

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