Two companies insist MyCC’s price-fixing allegations is ‘without merit’

PETALING JAYA: Two of the five feedmillers accused by the Malaysia Competition Commission (MyCC) for being involved in price-fixing practices in the chicken industry have dismissed the charge as “without merit”.

Responding to MyCC’s allegations, Leong Hup International Bhd and PPB Group Bhd said they would respond within the given time to defend their subsidiaries – Leong Hup Feedmill Malaysia Sdn Bhd, and FFM Bhd, respectively.

The other three companies named by MyCC in Friday’s press conference in Kuala Lumpur are Dindings Poultry Development Centre Sdn Bhd, Gold Coin Feedmills (Malaysia) Sdn Bhd and PK Agro-Industrial Products (M) Sdn Bhd.

In its statement, MyCC said the five enterprises had been found to have “provisionally entered an anti-competitive agreement within the chicken industry, infringing Section 4 of the Competition Act 2010 (Act 712)”.

However, MyCC said the findings were provisional and the companies were “yet to be found guilty”, and they have 30 days to submit their representation.

In a filing with Bursa Malaysia on Friday, Leong Hup International said the company will review the matter with its external legal counsel before submitting a written representation.

“At this juncture, the proposed decision including the proposed financial penalty and proposed directions are not final.

“The company and Leong Hup Feedmill strongly believe that the allegation of the aforesaid infringement is without merit and intend to defend such allegation vigorously.

“We will review the matter with the external legal counsel and submit written representations within the specified period and make an oral representation before MyCC,” said the statement.

In a similar notice to Bursa Malaysia, PPB Bhd, which owns 80% of FFM, said since MyCC’s findings were provisional, it should not be assumed that any enterprise had broken the law at this stage.

“FFM is of the view that the allegation of infringement is without merit.

“It will review the matter with its external legal counsel and respond to the MyCC within the stipulated time to defend its position on the matter,” it said.

The government had earlier banned the export of up to 3.6 million chickens from June 1 in an effort to stabilise the domestic supply and pricing of chicken.

Poultry farmers have been urging the government to provide reasonable subsidies for chicken and eggs, as they have been operating at a loss following skyrocketing prices of maize and soybean meal, which are imported.

When contacted, the managing director of a two-generation poultry farm, who wished to remain anonymous, said MyCC’s findings did not change the fact that import prices of soybean meal and maize – the principal components of chicken meat production – remained high.

“The allegations are not directly contributing to the increase in poultry prices,” he said, adding that except for Gold Coin Feedmills, other companies were integrators – outfits that run poultry farms along with feed manufacturing.

“Commercial feedmills or farmers produce their own feed, but soybean meal and maize are still 100% imported.”

The Federation of Livestock Farmers Associations of Malaysia had highlighted that maize used to cost RM800 per tonne before the pandemic, but is now more than RM1,800 per tonne.

Soybean meal now costs over RM2,650 per tonne, up from RM1,650 in January 2020.

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