EDITORIAL: According to media reports, two Competition Commission of Pakistan’s (CCP’s) teams ‘visited’ the Pakistan Poultry Association’s (PPA’s) office in Lahore and seized all sorts of records including minutes of important meetings and computer databases in order to investigate the affairs and suspected price manipulation on the part of the PPA in an objective manner. CCP officers know better than anybody of course that powerful special interest groups never leave their fingerprints, or any other compelling evidence for that matter, in official documents especially the formal minutes of important meetings. Yet such records still tend to divulge a treasure trove of information because of their failure to justify or explain incredible price distortions in the real market which just happen to fill their accounts with fat profits while everybody else is trying to wrap their heads around them. That information, in successive rounds - if the investigation and investigators are sincere - can lead to targeted forensic audits, interviews and even careful interrogations to get to the bottom of things.
There is something clearly amiss about poultry products and their sky-rocketing prices over the last year or so and if some people who are also part of the PPA have indeed played a dirty role in this process, then they would already be on their toes and looking to bury any evidence that the CCP could lay its hands on. You can count on the bad guys to be extra vigilant these days because only recently CCP issued show-cause notices to 19 feed companies for ‘cartelisation and a collective increase in feed prices’. So whatever ‘print and electronic record’ was handed over to CCP by PPA staff, after extending ‘full cooperation’, would have been put under the most intense microscope immediately in the hope of uncovering foul play which authorities say is at the centre of the abnormal inflation in the poultry sector.
The government ought to be eager to move things along because not CCP or PPA, at the end of the day, it has to answer for things like the 42 percent increase in egg prices, a 110 percent increase in chicken prices, and a 386 percent increase in prices of one-day broiler chicks between March 2020 and May 2021. There’s clearly been no roaring aggregate demand, in this or any other sector since well before the pandemic, so this particular brand of inflation is definitely cost-push. And since there haven’t been any supply bottlenecks worth mentioning either, it’s a very good bet that these prices rose on the directions of industry insiders who most likely deliberately created and exploited opportunities to make people pay a lot more than usual for their usual diet and also make super abnormal profits for themselves in the process.
That it has taken this long for CCP to spring into action, if this can indeed be called that, is in itself reason for a lot of concern. First, the government went into plain denial about any manipulative distortion in prices of the most essential items, then it thought it was a very good idea to blame so-called mafias while singing praise of the overall economy to soothe popular sentiment. And only when that also failed, and a lot more people began to suffer from the unacceptable prospect of not being able to afford something as basic as their daily food only because the government could do nothing more than badmouth price-toggling, law-breaking cartels, was the CCP mobilised to investigate alleged violation of Section-4 of the Competition Act 2010 in the poultry sector.
The Act mandates the Commission to ‘ensure free competition in all spheres of commercial and economic activity, to enhance economic efficiency and to protect consumers from anti-competitive practices, including deceptive marketing practices’. Perhaps once CCP is done investigating all the different interest groups that have been illegally controlling prices in different industries and sectors, somebody inside the government should raise questions about the Commission’s own delayed response in this regard and initiate a very serious investigation there too if one is needed. That would be far better, from the Pakistan Tehreek-e-Insaf (PTI) government’s point of view, than voters raising such questions in 2023.
Copyright Business Recorder, 2021