High court suspends fines on Malaysian feed cartel pending review  

MALAYSIA – A Malaysian High Court has temporarily halted the payment of MYR415.5 (US$92.8) million in fines imposed on five major poultry feed manufacturers. 

This decision follows the companies’ appeals, which cited potential disruptions to the poultry sector as a key reason for suspending the fines.  

The fines, issued in December 2023 by the Malaysia Competition Commission (MyCC), stem from allegations that the manufacturers formed a price-fixing cartel for poultry feed. 

According to MyCC, the cartel’s actions significantly impacted the cost of chicken production in Malaysia, where feed constitutes approximately 73% of production costs. 

MyCC’s investigation found that the implicated companies, which control 40% of the national poultry feed market, raised prices simultaneously over two-and-a-half years, contravening competition laws.  

The High Court in Kuala Lumpur granted a stay on the fines after legal representatives of the feed companies argued that paying such substantial penalties could destabilise the poultry sector. 

They contended that disruptions in the feed supply chain could have downstream effects on chicken producers and consumers. However, MyCC’s counsel argued that the fines were necessary to enforce competition laws and protect market integrity.  

The court has established a timeline for the case, with affidavits to be filed by January 31. Submissions will be reviewed on March 21, and a full hearing is scheduled for April 8.  

The MYR415.5 (US$92.8) million fine represents the largest penalty imposed by MyCC since its inception in 2011. 

The commission’s investigation uncovered evidence that the manufacturers coordinated price increases during the period leading up to June 2022. 

The companies fined include Leong Hup Feedmill Malaysia Sdn. Bhd., FFM Berhad, Gold Coin Feedmills (Malaysia) Sdn. Bhd., Dindings Poultry Development Centre Sdn. Bhd., and PK Agro-Industrial Products (M) Sdn. Bhd.  

MyCC emphasised the importance of addressing cartel behaviour in critical industries such as poultry feed. 

A senior official stated that the commission remains committed to monitoring the poultry sector, particularly after recent government decisions to remove subsidies and price controls on chicken.  

The decision to suspend the fines highlights the importance of maintaining stability in the poultry sector, which is a vital component of Malaysia’s food supply chain. 

The sector plays a significant role in ensuring affordable protein for the population and is a key driver of agricultural activity in the country.  

The case has drawn attention to the challenges of balancing strict enforcement of competition laws with the operational needs of essential industries.

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