Malaysia’s Competition Appeal Tribunal (CAT) has dismissed all appeals brought by four poultry feed companies in an alleged price-fixing scheme.
The CAT agreed with the decision by the Malaysia Competition Commission (MyCC) in December 2023 that the companies coordinated among themselves to fix the amount by which the prices of chicken feed would be increased.
The four companies involved in the appeal are Leong Hup Feedmill Malaysia Sdn. Bhd., Dindings Poultry Development Centre Sdn. Bhd., FFM Berhad and Gold Coin Feedmills (M) Sdn. Bhd. A fifth company, PK Agro-Industrial Products (M) Sdn. Bhd. (PK Agro), did not appeal the ruling.
Chicken feed is a key input in poultry farming and any coordination on price increases can affect the cost of producing chicken and, ultimately, the prices paid by consumers.
After reviewing all documents and hearing arguments from both sides, the CAT found that MyCC’s decision was supported by strong evidence which showed coordination on price increases during three separate periods between January 31, 2020, and June 30, 2022. The CAT confirmed that MyCC had correctly applied the provisions in the Competition Act 2010 and that agreements between competitors to fix prices are automatically considered harmful to competition.
The CAT also upheld all financial penalties and directions imposed by MyCC. It found that the penalties were within the legal limit and were appropriate given the seriousness of the infringements. The CAT saw no reason to reduce the penalties and further affirmed the aggravated penalty imposed on one of the companies for disrupting the investigation process.
Importantly, the CAT rejected the companies’ arguments that MyCC had acted unfairly, without basis or in breach of due process. The CAT confirmed that MyCC had conducted its investigation within its legal powers under the Competition Act 2010 and had complied with proper procedures throughout.
“This unanimous decision is a strong affirmation of MyCC’s role in protecting healthy competition in Malaysia. Markets function best when businesses compete honestly and independently. When competitors coordinate on prices, it harms the competitive process and can negatively impact consumers and the wider economy,” said Datuk Haji Iskandar Ismail, CEO of MyCC. “MyCC will continue to monitor the conduct of the companies involved as well as other players in the market in ensuring full compliance with the Competition Act 2010. MyCC remains committed to defending its decision in this case and to taking firm action against anti-competitive conduct to protect businesses and consumers in Malaysia.”
Case background
MyCC said it had suspected the five enterprises had engaged in price-fixing agreements, and conducted an extensive investigation between November 2021 and June 2022. In February 2022, it formed a special task force to investigate competition-related issues in the chicken and egg industry. Throughout the investigation, MyCC said it carried out raids, took statements, requested information and conducted in-depth analysis of relevant data that it had gathered.
