CCP takes notice of possible price manipulation in hatchery sector

KARACHI: Taking notice of the extraordinary increase in the prices of day-old chick (DOC), the Competition Commission of Pakistan (CCP) has advised hatcheries to refrain from any anti-competitive conduct prohibited under the Competition Act 2010, said a statement on Saturday.

DOC producers have also been asked to let the prices be determined by market forces based on demand and supply mechanisms. Hatcheries are further directed to submit comprehensive records of daily day-old chick (DOC) prices spanning the past few months, including the current month.

This action follows numerous complaints regarding alleged price manipulation and possible collusion in the sale of DOCs. Reports indicate an extraordinary 250 per cent increase in DOC prices, with rates soaring to Rs220 per chick compared to the average cost of Rs50 to 60 per chick. The CCP is analysing whether this abrupt and disproportionate price surge, occurring without any notable shift in market dynamics, is due to any anti-competitive behaviour by DOC producers.

It is noteworthy that in majority of the complaints it is highlighted that DOCs are not included in the essential commodities list maintained by respective provincial livestock ministries, leaving their pricing entirely in the hands of suppliers. In contrast, broiler chicken, classified as an essential commodity, has its prices regulated by the district government. This highlights the urgent need for greater transparency and accountability in this critical segment of the poultry sector, the statement said.

The CCP has already taken steps to address similar issues in the past. In December 2021, the commission conducted a comprehensive enquiry in the poultry sector, revealing that eight DOC-producing companies, collectively holding over 50 per cent market share, were allegedly involved in price fixing and cartelisation. Show cause notices were issued, and hearings are taking place with the parties involved.