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Feed prices under investigation

Published on 16 July, 2010, Last updated at 02:58 GMT
 
Feed prices under investigation

Karachi, Pakistan -- The Pakistan Poultry Association (PPA) has been issued a show cause notice for allegedly controlling the pricing mechanism of poultry products.

The Competition Comm-ission of Pakistan (CCP) has said that the association is engaged in practices prohibited under the Competition Ordinance of 2010.

Representatives of the association have been summoned to appear before CCP. The commission has also demanded the submission of a written explanation from PPA.

Earlier, an investigation was started after the receipt of numerous emails from consumers complaining of high prices. Furthermore, news reports also highlighted an unsubstantiated hike in prices of day-old chicks and poultry feed.

However, the Founding Chairman of PPA, Khalil Sattar, brushed aside the allegations, saying: “I wish we could control market prices of poultry. It seems that the government wants to draw its own conclusions,” he responded when contacted for comments.

He explained that poultry items were highly perishable and thus it was difficult to manipulate their supply or demand. He added that in order to control prices one needed to control supply, which was not possible for the association. “How can we manipulate prices then?” he questioned.

Sattar, who is currently the Chairman of K&N, revealed that almost 40 per cent of the poultry farms in Pakistan have been forced to shut down which has disrupted the balance of supply and demand in the market. He predicted that the disequilibrium between demand and supply would worsen over the next couple of years.

He maintained that the sharp ups and downs in the prices of chicken and eggs were all determined by market forces and not the poultry association.

“We only record daily prices and that is all,” commented Dr Bashir Mahmood Bhatti, Secretary General of the PPA. He attributed the rise in prices to increased cost of poultry feed and general cost of doing business in the country.

Bhatti was of the view that the government could help poultry farms by providing cheap wheat.

Meanwhile, the Competition Commission has said that a detailed enquiry has revealed that the platform of PPA has been used in manipulating the poultry market.

On the recommendation of the committee that conducted the enquiry, the Commission deemed it appropriate to conduct an inspection of PPA offices located in Islamabad, Lahore and Karachi under the power granted to it by Section 34 of the Competition Ordinance.

The commission said that the PPA, by deliberating, deciding and announcing the prices and mechanism of sale of poultry feed, broiler meat, day-old chicks and eggs has violated more than one section of the Competition Ordinance of 2010.

The allegations of collective price fixing, if proven, can be interpreted as preventing, restricting or reducing competition in the relevant market which is a violation of Section 4 of the ordinance.

 

 
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