Tribunal rejects firms’ appeal over chicken feed cartel fine

 The Competition Appeal Tribunal affirms the Malaysia Competition Commission’s decision to impose a fine of more than RM415 million on the companies.

The Malaysia Competition Commission had imposed a fine of more than RM415 million on five firms in December 2023 for forming a ‘chicken feed cartel’ to fix prices.

PETALING JAYA:

 The Competition Appeal Tribunal has unanimously rejected the appeals of four feedmillers who challenged the Malaysia Competition Commission’s (MyCC) decision to impose a fine for forming a “chicken feed cartel” to fix prices.

The firms – Leong Hup Feedmill Malaysia Sdn Bhd (LFM), Dindings Poultry Development Centre Sdn Bhd, FFM Bhd, and Gold Coin Feedmills (M) Sdn Bhd – were appealing MyCC’s decision, delivered in December 2023.

In a statement, MyCC said the tribunal agreed that the companies had coordinated price increases on chicken feed, a key input in poultry farming, during three periods between January 31, 2020, and June 30, 2022.

“Any coordination on price increases can affect the cost of producing chicken and, ultimately, the prices paid by consumers,” MyCC said in a statement.

It said the tribunal confirmed that the Competition Act 2010 had been correctly applied in the case, and that agreements between competitors to fix prices were automatically considered harmful to competition.

The commission also said the tribunal found the penalties imposed on the feedmillers were within the legal limit and were appropriate, given the seriousness of the infringements.

“The tribunal saw no reason to reduce the penalties and further affirmed the aggravated penalty imposed on one of the companies for disrupting the investigation process,” MyCC added.

It said the tribunal rejected the companies’ submissions it had acted unfairly, without basis, or in breach of due process.

The tribunal confirmed that MyCC had carried out its investigation within its legal powers under the Competition Act and had followed due process.

The four companies, along with a fifth firm, PK Agro-Industrial Products (M) Sdn Bhd, were fined a total of over RM415 million – the commission’s biggest fine to date – for forming a “chicken feed cartel” to fix prices.

PK Agro-Industrial Products had decided not to appeal the fine. - FMT