CCP Penalizes Poultry Hatcheries for Price-Fixing

The Competition Commission of Pakistan (CCP) has levied a cumulative fine of Rs155 million on eight prominent poultry hatcheries. This action comes in response to their involvement in “cartelisation and price manipulation of day-old broiler chicks (DOCs),” according to an official statement released on Wednesday.

The CCP initiated a suo motu investigation into potential cartel behavior within the Day-Old Chick (DOC) market, leading to an extensive inquiry. The investigation revealed that major hatcheries—namely Sadiq Poultry, Hi-Tech Group, Islamabad Group, Olympia Group, Jadeed Group, Supreme Farms (Seasons Group), Big Bird Group, and Sabir’s Group—participated in coordinated efforts to fix prices, thereby contravening Section 4 of the Competition Act, 2010.

According to the CCP, these hatcheries colluded by discussing and setting prices within a WhatsApp group named “Chick Rate Announcement,” which was managed by a high-ranking executive from Big Bird Group.

Dr. Shahid, the Marketing Manager at Big Bird Group, was responsible for disseminating daily price updates. He would share the next day’s prices with group members through text messages or WhatsApp on a daily basis.

Dr. Abdul Karim, Chairman of the Hatchery Affairs Committee at the Pakistan Poultry Association (PPA), and Major (R) Syed Javaid Hussain Bukhari, Secretary General of PPA, were also participants in the group.

Group members engaged in active discussions and shared prospective prices on approximately 198 occasions between 2019 and 2021. Price-sensitive information was exchanged 108 times via text messages and 87 times through WhatsApp, according to the commission.

The CCP further noted that senior officials from the Poultry Association who were present in the group did not take any steps to halt the sharing of price information, effectively enabling the collusion.

The cartel routinely announced standard DOC rates for Punjab, and with slight freight adjustments, also impacted rates in Multan and Karachi.

Between March 2020 and April 2021, DOC prices experienced a 346% surge, escalating from Rs17.92 to Rs79.92 per chick, which significantly contributed to the inflation of broiler meat prices.

The CCP emphasized that Section 4 of the Competition Act, 2010, prohibits collusive agreements aimed at fixing prices, controlling supply, or restricting production.

Such practices undermine market competition. Trade associations are intended to foster sector development, not to disseminate price-sensitive information or facilitate cartel behavior. Price-fixing through associations constitutes a severe market distortion and an exploitation of consumers. Prices should be dictated by the dynamics of free demand and supply.

The CCP also acknowledged recent complaints indicating that hatcheries are once again engaging in collusive practices. The prices of day-old chicks have recently soared to Rs230 per chick, while the appropriate market rate should be around Rs78 per chick.