Panel to check if farmers contravened Competition Act

  • Nation
  • Friday, 02 Nov 2012

PETALING JAYA: The chicken layer industry which recently culled five million hens in an effort to reduce production costs will be the latest to be probed by a commission set up to ensure healthy competition within industries.

The Malaysia Competition Commission (MyCC), which was set up last year to curb anti-competitive or collusive activities among companies, will look into the widespread culling which has resulted in a shortage of egg supply and immediate price increase of between two and five sen per egg.

Its CEO Shila Dorai Raj said that the investigations would be to find out if the culling was done collusively among farmers or contained any anti-competitive elements.

“A unilateral decision by a farmer to reduce production for prudent costs management may not be an anti-competitive act.

“However, if it is done in agreement with other farmers, it may be an infringement under the Competition Act 2010,” she said in a statement yesterday.

The Act prohibits the formation of any collusion by companies to set prices of goods or services, or limit and control production, as this will restrict healthy competition within the market.

Farmers who are found to breach the Act may be imposed a penalty of not more than 10% of their overall turnover, besides other remedial orders.

The investigation by the commission followed recent reports in The Star that due to rising production costs, brought about by a hike in livestock feed prices, farmers have been culling up to 10% more layer hens.

The farmers typically cull 10% of their older layer hens each cycle (a cycle is between one and three months, depending on the size of the farm) to make room for younger, more productive hens.

When contacted, Federation of Livestock Farmers' Associations of Malaysia adviser Datuk Fong Kok Yong denied that the culling was unilateral.

“Some farmers cull more than others. Some do not cull at all. The ones who have increased the number of hens being culled are doing so because they cannot afford the current stockfeed prices,” he said.

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