BCC fines Peoples Poultry and Hatchery Tk 7.2m

The Bangladesh Competition Commission (BCC) fined Peoples Poultry and Hatchery Limited Tk 7.2 million for colluding to artificially increase egg prices as well as manipulate supply in violation of the Competition Act, 2012.

The BCC launched an investigation in 2022 based on a report from the Directorate of National Consumer Rights Protection, along with reports from various newspapers and electronic media.

The probe found evidence that Peoples Poultry and Hatchery had engaged in collusive practices with Kazi Farms Group, CP Bangladesh Company Limited, Diamond Egg Limited, and Egg Merchant Aratdar Bahumukhi Samabay Samity at Tejgaon in Dhaka (egg wholesalers) to control egg prices and supply, says a BCC press release on Wednesday.

The BCC had filed a suo motu case against People's Poultry and Hatchery under Section 15 of the Competition Act, 2012. The charges included conspiratorial collusion, limiting or controlling production and supply, and setting artificially high purchase and sale prices.

The investigation report revealed that Peoples Poultry set egg prices 30-40 paisa (Tk 0.3-0.4) above market rates by instructing traders through messages before dispatching eggs for sale. The BCC found that this price manipulation was coordinated with other companies. Traders who refused to comply with the instruction were denied supply.

The BCC said the company mixed hatching eggs with commercial red eggs and coerced traders into buying them at the price of commercial eggs (brown eggs). Traders who resisted faced threats, including vehicle impoundment, forcing them to purchase eggs at the dictated price to avoid losses on transport costs.

During the price-fixing period, the wholesale market price of each egg was Tk 11.60-11.80, whereas People's Poultry and Hatchery Limited charged Tk 12 per egg, artificially inflating market prices, found BCC. Following the investigation and subsequent hearings, the BCC concluded that People's Poultry and Hatchery Limited had engaged in anti-competitive practices.

The company's actions, in association with other firms, resulted in an abnormal increase in egg prices and a restriction of supply-offenses punishable under Section 15 of the Competition Act, 2012. Given that this was the first such case against the company, the BCC imposed a fine of Tk 7.2 billion (Tk 72,02,973), calculated based on the company's average turnover over the past three years as per Section 20(A) of the Competition Act, 2012.

The company has been ordered to deposit the amount within 30 working days. Failure to comply will result in an additional penalty of up to Tk 0.1 million per day under Section 20(C) of the Competition Act, 2012. However, the company has the right to review or appeal against the decision as per legal provisions.

In October 2023, the BCC had slapped substantial fines on Kazi Farm and Saguna Foods for manipulating poultry market. Kazi Farm, a household name in the poultry industry, was fined a staggering Tk 50 million while Saguna Foods Pvt Ltd Tk 34 million.

The action followed a year-long investigation into the soaring prices of eggs and broiler in August 2022, which saw egg prices skyrocket to Tk 180 a dozen and broiler chicken to Tk 300 a kg. The BCC initiated its probe in the wake of a public outcry over exorbitant prices that gripped the poultry market in August 2022.

The FE, however, could not reach Peoples Poultry and Hatchery, Kazi Farms, Diamond Eggs and CP Bangladesh for comments over phone.

tonmoy.wardad@gmail.com