Fowl play? 13 fresh chicken distributors in competition watchdog's crosshairs

Fowl play? 13 fresh chicken distributors in competition watchdog's crosshairs

The Competition Commission of Singapore says the companies had engaged in discussions from at least 2007 to 2014 on prices and coordinated price increases of chicken products sold in Singapore.

SINGAPORE: Thirteen fresh chicken distributors are under the scrutiny of the Competition Commission of Singapore (CCS) after it received a complaint on alleged anti-competitive conduct.

CCS has issued a Proposed Infringement Decision (PID) against the distributors, it said in a press release on Tuesday (Mar 8). It added that it started the investigation into the fresh chicken distribution industry after a complaint.

According to CCS, the distributors had engaged in anti-competitive agreements to coordinate the amount and timing of price increases, and agreed not to compete for each other’s customers in the market for the supply of fresh chicken products in Singapore.

The distributors under scrutiny collectively supply more than 90 per cent of the fresh chicken products in Singapore, amounting to approximately half a billion dollars annually, said CCS.

The 13 distributors are:

  • Gold Chic Poultry Supply
  • Hua Kun Food Industry
  • Hock Chuan Heng Farm and its sole-proprietor Hy-fresh Industries
  • Kee Song Brothers Poultry Industries
  • Lee Say Poultry Industrial and its sole-proprietor Lee Say Group
  • Hup Heng Poultry Industries
  • KSB Distribution
  • Prestige Fortune
  • Ng Ai Muslim Poultry Industries
  • Sinmah Poultry Processing
  • Toh Thye San Farm
  • Tong Huat Poultry Processing Factory and Ban Hong Poultry.

Said CCS: “The parties who are in the business of trading in or distributing fresh chicken products had engaged in discussions, from at least 2007 to 2014, on prices and also expressly coordinated the price increases of fresh chicken products sold in Singapore.”

“During these meetings, the parties had also agreed to not compete for each other’s customers,” it added, referring to a non-aggression pact among the distributors.

The pact as well as price increases were aimed at distorting the prices of fresh chicken products in Singapore, said CCS. By agreeing not to compete for each other’s customers, CCS said they had restricted the choices available to customers.

The coordinated price increases further reduced customer choice as it provided few options for customers to switch distributors and hence, “creating a less competitive landscape”.

Under the Competition Act, CCS said business entities should not enter into any agreement or arrangement that prevents, restricts or distorts competition. They should, instead, independently determine their responses to competition.

The 13 distributors will have six weeks from the receipt of the PID to make their representations to CCS. The commission will then make its final decision, after careful consideration of the representations, as well as all available information and evidence, it said.

CCS has the discretion to impose a financial penalty on any undertaking that was a party to an infringement. The penalty that may be imposed is up to 10 per cent of the turnover of the business of the undertaking in Singapore for each year of infringement, for up to a maximum of three years.

Source: CNA/xk