The Competition and Consumer Protection Commission (CCPC) has fined four prominent hatcheries in Lusaka for fixing trade conditions and setting production quotas for day old chicks.
The CCPC has fined Hybrid Poultry Farm Zambia Limited, Ross Breeders Zambia Limited, Quantum Foods Zambia Limited and TIGER Chicks seven (7%) percent of their annual turnover .
CCPC Public Relations Officer Namukolo Kasumpa disclosed the development in a press statement issued to ZANIS in Lusaka today.
Ms Kasumpa said the Commission’s Board decided to fine the four hatcheries during its 30th meeting when it met to adjudicate cases on 1stMarch this year following extensive and comprehensive investigations in a long-running cartel case.
She said the Competition and Consumer Protection Commission found that the four hatcheries were involved in collusive practices contrary to the provisions of the Competition and Consumer Protection Act, No. 24 of 2010.
Ms Kasumpa further said the Board has ordered the hatcheries to terminate the agreement and independently set a viable and auditable time requirement for pre-booking.
She said the Board also directed that the hatcheries develop and implement compliance programmes in their respective firms within 90 days of receiving the directive and to publish quarterly performance numbers on deliveries of day old chicks in three (3) newspapers with nationwide circulation.
The Commission initiated the investigation in 2013 after the Poultry Association of Zambia (PAZ) posted a news item on its website on 26thFebruary 2013 which stated that hatcheries through PAZ had agreed to only set eggs according to demand and that poultry farmers had to book four weeks in advance for day old chicks.
The investigation which lasted four (4) years revealed that the four hatcheries whilst being competitors in the production of day old chicks had through the Poultry Association of Zambia (PAZ) agreed to develop and implement a common policy known as a ‘Chick Order Policy’ that required poultry farmers to book day old chicks four weeks in advance.
Further, the investigation revealed that there was no justification for all four hatcheries to have a common policy as each hatchery had different production capacities, customer base, number of agents and employees.
It further noted that not all hatcheries would take the same time to sort out orders from poultry growers neither did each hatchery need four weeks to supply day old chicks to farmers.
The investigation revealed that the four weeks’ time requirement agreed by the hatcheries was in fact a trading condition and was therefore in violation of section 9(1) (a) of the CCP Act.
The Board noted that the agreement affected competition among hatcheries in the market for the sale of day old chicks since a similar trading condition was imposed on poultry farmers with limited choice of a hatchery to deal with.
In addition, the agreement was discouraging to other hatcheries from investing in technology or methods that make it possible to supply day old chicks less than the four weeks required by the agreement.
Ms Kasumpa has since warned business houses to desist from engaging in collusive arrangements as the law will be applied firmly on perpetrators.
She maintained that the Commission remains committed to stamping out collusive and anti-competitive practices which are negatively impacting on Zambia’s quest to promote a competitive business environment and an inclusive economy for job creation.