Had it not been for the CCP, no one wouldve realized that a strong cartel functioned in determining the price people paid to get the precious white meat on their tables.
The thorough enquiry conducted by the Competition Commission of Pakistan has made astonishing discoveries, revealing extensive cartelisation of the poultry industry, backed by the Pakistan Poultry Association (PPA).
Whacking a Rs50 million penalty on the PPA, the CCP has not only penalised the countrys poultry industry, but also sent a discreet warning to cartels in other industries.
The PPA had contested the allegations of the Commission, but without much avail, particularly because most of the CCPs rebuttals proved the defences of the PPA were quite weak.
It was no rocket science to see that PPAs alibis were quite groundless. Upon searching the PPAs offices in Lahore, Karachi and Islamabad, the CCP found documents indicating that the association had been involved in price fixing through controlling supplies of parent stocks of chicken.
Clandestine meetings with other wings of the poultry and chicken supply chain also bloated the seemingly resilient price hike in the final chicken product that reached the consumers.
The poultry industry in the country comprises of several interconnected sectors that help bring the final product to the market. From feed manufacturers, breeders and hatcheries, to broiler and layer farms that provide the meat and eggs, the sturdy chain is almost unbreakable. And hence the action of even one, affects the final product.
Deliberately reducing the number of egg-providing parent stocks by selling them as commercial chicken, early culling of chicken to reduce bird population, rate-fixing of broiler chicken and even controlling prices of various poultry feeds were some major malpractices conducted by the PPA.
No wonder chicken prices had been sky rocketing in the last few months.
PPA presented several explanations against accusations charged at them. However, face-saving is very obvious from the justifications presented by the PPA. One such argument was that since CCP Ordinance was repromulgated in March 2010, PPA should not be held accountable for actions before that time.
In fact the PPA actually admitted to deliberately reducing the parent stock under pretext that "the poultry industry could not have done anything else but this to prevent losses".
Being an association responsible for representing industry players in the government and maintaining overall stability, PPA is supposed to refrain from collusive practices that affect market dynamics including price fixing and production control.
Thanks to the CCP, haywire price mechanics of poultry will be brought to order. Local media sources have cited reductions of around Rs20 per kg in the prices of chicken in the last week, a decision that would not have seen the light of the day without CCPs efforts.
This move by the CCP comes as the Competition Ordinances lapses on August 17, with hopes that the passage of the new ordinance at the next session of the National Assembly at the end of this month will help the CCP continue its laudable practices.