MyCC imposes financial penalty against five chicken feed millers for price fixing cartel

27 February 2024

On 22 December 2023, the Malaysia Competition Commission ("MyCC") issued a decision in relation to the alleged infringement of section 4 of the Competition Act 2010 ("Section 4 Prohibition") by five chicken feed millers that formed a price fixing cartel for poultry feed. The five entities, namely:

  • Leong Hup Feedmill Malaysia Sdn. Bhd. (“Leong Hup”);
  • FFM Berhad (“FFM”);
  • Gold Coin Feedmills (Malaysia) Sdn. Bhd. (“Gold Coin”);
  • Dindings Poultry Development Centre Sdn. Bhd.(“Dindings”); and
  • PK Agro-Industrial Products (M) Sdn. Bhd. (“PK Agro”),

(collectively, “Appellants”), were found to have participated in agreements and/or concerted practices relating to the pricing of poultry feed, thus infringing the Section 4 Prohibition. Consequently, MyCC imposed financial penalties amounting to RM415.5 million (approx. S$119.5 million) on the Appellants.

MyCC found evidence of identical increment in the quantum of poultry feed prices among the Appellants between January 2020 and June 2022. Additionally, communication records retrieved during the investigation showed a significant correlation with the dates of the price announcements, implying a deliberate effort to synchronise their actions. Witness statements further unequivocally reaffirmed the occurrence of an oral exchange of pricing information for raw materials before, during and subsequent to Malaysian Feedmillers Association meetings.

In addition to imposing financial penalties on the Appellants, MyCC also issued directions to be adhered to as follows:

  • Cease and Desist Order – Appellants to cease participation in poultry feed cartel;
  • Monthly Reporting on Poultry Feed Prices – Appellants to submit on poultry feed price increases and decreases;
  • Review and Enhance Compliance Training Programs – FFM, Gold Coin, and Dindings to enhance their competition law compliance training program and enrol employees and board members for the program;
  • Implementation of Compliance Programs – PK Agro and Leong Hup to enrol employees and board members in a competition law compliance program; and
  • Recognition of Competition Law Infringements as Misconduct – Appellants to include a provision in their respective Code of Conduct recognising involvement in Competition Law infringements as misconduct.