The Competition Commission of Malaysia has sanctioned and fined the Nation’s five major feed producers for price fixing.  The implicated companies were fined a total of $90 million for establishing a cartel in 2021.  Investigations confirmed that the group engaged in communications to unjustly raise feed prices that were attributed to “escalation in the cost of ingredients”.  According to the Competition Commission, “There was a correlation between communications and pricing decisions, suggesting a deliberate effort to synchronize actions and to compromise competition within the chicken poultry feed market.”

The Competition Commission pointed to the “identical quantum increases in prices simultaneously, although unique formulations should have resulted in distinct cost structures for each enterprise in the determination of price.  The deliberate collective alignment in price increment considering the differences in raw material composition raised further concerns about the concerted practices by the five enterprises”.

In Malaysia, independent farmers purchase feed for broiler flocks that are sold to processors.  In some cases, there is a measure of integration with feed companies supplying chicks and undertaking to repurchase live broilers.

In addition to fines, the implicated companies were ordered to cease participation in any cartel, submit monthly feed price increases or decreases for review and to comply with competition law.

The CEO of the Competition Commission stated, “We have been tasked by the Government to eradicate cartels and we will continue to do so without fear or favor.  As we have intimated before, we are still monitoring the chicken industry since the recent Government decision to discontinue subsidies and price control on chicken.”