PETALING JAYA: Five players in the chickenfeed industry have been hit with a RM415mil fine for what the Malaysian Competition Commission (MyCC) has deemed price-fixing infringements.
Of the five, Leong Hup Feedmill Malaysia Sdn Bhd (LFM), was slapped with the biggest fine. However, the company insisted the decision was done “without merit” and will challenge it.
“In consultation with external legal counsel, the Company and LFM will take the necessary and appropriate actions to challenge the decision and apply for a stay,” Leong Hup International Bhd said in a filing with Bursa Malaysia yesterday.
LFM, a wholly-owned subsidiary of Leong Hup International, was fined RM157.47mil for price-fixing by allegedly forming a cartel.
Earlier yesterday, MyCC announced that five companies were fined RM415mil for fixing chickenfeed prices.
The other four companies are Dindings Poultry Development Centre Sdn Bhd, FFM Bhd, Gold Coin Feedmills (Malaysia) Sdn Bhd, and PK Agro-Industrial Products (M) Sdn Bhd.
Dindings Poultry was fined RM70mil, FFM (RM42.7mil), Gold Coin Feedmills (RM97.5mil), and PK Agro-Industrial (RM47.8mil).
FFM also maintains the commission’s decision was “without merit.”
In its Bursa Malaysia filing yesterday, it said it would consult with its external legal counsels on the appropriate action to take to challenge the decision.
MyCC said the cumulative fine for infringing Section 4 of the Competition Act 2010 was also the largest penalty imposed to date.
Its chief executive officer Iskandar Ismail said the commission found the five had plotted to increase prices by between RM1 and RM4 per 50kg.
“MyCC also identified several instances where the cost of raw materials had decreased and despite the decline, the enterprises still opted to increase the quantum of poultry feed prices by the same level.
“Consequently, any distortions or imbalances in competition within the chickenfeed market can have a ripple effect across the entire supply chain of the industry and the impact eventually reaches consumers,” he told reporters at MyCC’s office here yesterday.
He said the offences were committed in three separate periods throughout January 2020 to June 2022.
MyCC has also issued an order instructing the companies to cease participating in the cartel.
The five can, however, appeal to the Domestic Trade and Cost of Living Ministry’s Competition Appeal Tribunal, he added.
“Cartels are a supreme evil in competition law. That is why we acted strictly to tackle these issues. It is the highest form of economic sabotage, more so in a matter of public interest,” Iskandar said.
He said MyCC was also monitoring the chicken industry following the recent government decision to discontinue subsidies and price controls on chicken.
“We hope the lesson learnt from this case will be a deterrent to all, in particular other cartels,” he said.
