Background of Case :

The Commission took suo motto notice and conducted an enquiry which found that the M/s Pakistan Poultry Association (the ‘PPA’) had issued directives to collusively reduce production to increase the prices. The enquiry was based on documents impounded during inspection on PPA’s offices in Islamabad, Lahore and Karachi.

CCP taking notice of media reports regarding an unprecedented hike in prices of poultry products and possible cartelization, initiated a suo moto enquiry. An Enquiry Committee was appointed to conduct an enquiry into possible violations of Section 4 of the Act. On the basis of information available, CCP also authorized its officers for search and inspection of Pakistan Poultry Association’s (PPA) offices. The Enquiry Report submitted by the Enquiry Committee concluded that there was prima facie, violation of Section 4 of the Act by PPA. Based on the recommendations of the Enquiry Report, PPA was issued a Show Cause Notice.

The Order:

The Commission in its Order dated 16-08-10 CCP said in its order that collective decisions taken on economic aspects, as practiced by the PPA, were against the concept of competition, negated the idea of a free market and substantiated the existence of a cartel. Hence, a penalty amounting to Rs. 50 million was imposed on PPA.

It was not denied at the part of PPA that production was being controlled to manipulate prices. The association’s representative said the industry could have done nothing else to prevent losses. They clarified that the grandparent and parent stocks were not meant for sale as meat before they became infertile. It was observed in the Order that PPA had been unable to rebut the evidence presented in the inquiry report regarding collusive decisions with regard to pricing, production and sale of broiler chicken.

It was further observed that PPA’s feed mill wing had met to take decisions regarding the price of poultry feeds. The PPA had said that prices of perishable products like feeds could not be manipulated because their stocks could not be stored.

Current Status:

PPA filed appeal before the Honourable Islamabad High Court which is pending adjudication. The operation of Order has been suspended.