Domestic Trade and Cost of Living Deputy Minister Fuziah Salleh regards the action by five chicken feed manufacturers in forming a price-fixing cartel for poultry feed as the highest level of betrayal against Malaysia and its competition laws.
Their action has made it difficult to control chicken prices, and the government has had to provide a large subsidy to cover the chicken subsidy at the production level.
“The government has issued RM3.8 billion in subsidies to cover the cost of chicken and eggs from February 2022 to November, with 72.8 per cent of chicken production costs due to poultry feed.
“When there is a cartel controlling 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 kg.
“It is difficult for the chicken rearers to get a lower price for poultry feed as these five companies are involved in 40 per cent of the chicken feed production,” she said.
The government is committed to stopping the “cartel” practice and has allocated RM10 million to the Malaysian Competition Commission (MyCC) in Budget 2024.
This follows from reports that five companies had colluded in fixing the price of chicken feed during the pandemic causing prices of chicken to soar.
The Malaysia Competition Commission imposed nearly RM415.5 million in penalties against the five poultry feed manufacturers it was investigating for infringing Section 4 of the Competition Act 2010 (Act 712) by forming a price-fixing cartel for poultry feed.
It said the companies include Leong Hup Feedmill (M) Sdn Bhd, FFM Berhad, Gold Coin Feedmills (M) Sdn Bhd, Dindings Poultry Development Centre Sdn Bhd, and PK Agro-Industrial Products (M) Sdn Bhd.
According to the commission investigation conducted between January 2020 and March 2022 unravelled the distortion in the poultry feed market with multiple evidence in the form of price announcements, pricing patterns, and communication among the enterprises.
