Price-fixing cartel makes difficult for govt to control price - Fuziah

23 Dec 2023 04:22pm

KUANTAN - Deputy Minister of Domestic Trade and Cost of Living Fuziah Salleh regarded the action by five chicken feed manufacturers in forming a price-fixing cartel for poultry feed as the highest level of betrayal against the country and competition laws.

She said said their action had made it difficult to control the price of chicken and the government had to provide a large subsidy to cover the chicken subsidy at the production level.

"The government has issued subsidies amounting to RM3.8 billion to cover the cost of chicken and eggs from February 2022 to last November and 72.8 per cent of the cost of chicken production is the cost of poultry feed.

"When there is a cartel that controls the price of chicken feed, it is difficult for the government to control the price of chicken at a set rate of RM9.40 per kilogram. It is difficult for the chicken rearers to get a cheaper price for poultry feed because these five companies are involved in 40 per cent of the chicken feed production,” she added.

She told this to reporters after visiting a supermarket here to monitor the implementation of the 2023 Christmas Season Maximum Price Scheme (SHMMP) today.

She was accompanied by the ministry’s director-general of enforcement Datuk Azman Adam.

Fuziah said the government is committed to stopping the "cartel” practice and has allocated RM10 million to the Malaysian Competition Commission (MyCC) in the 2024 Budget.

Yesterday, the media reported that five companies - Leong Hup Feedmill Malaysia Sdn. Bhd. (Leong Hup), FFM Berhad (FFM), Gold Coin Feedmills (Malaysia) Sdn. Bhd. (Gold Coin), Dindings Poultry Development Centre Sdn. Bhd. (Dindings Poultry), and PK Agro-Industrial Products (M) Sdn. Bhd. (PK Agro) - were fined a total of MYR415 million (US$89.6 million) for the "formation of a price-fixing cartel for poultry feed.”

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According to MyCC, an investigation was conducted between November 2021 and June 2022 following suspicion that the five companies had engaged in price-fixing agreements.

The investigation discovered distortion in the poultry feed market, with evidence of an "identical increment” in the increase of poultry feed prices among the companies between January 2020 and June 2022.

Regarding the SHMMP, Fuziah said the most complaints received were during its implementation for the Chinese New Year celebration, with 116 cases, followed by Aidilfitri (60 cases), Gawai Festival (18 cases), Deepavali (five cases ) and one case during the Kaamatan Festival.

The most common complaint was over the failure of traders to display the pink price tags on controlled price items, she added. - BERNAMA

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