Culling to reduce egg production could be anti-competition, says group

STAR, 1 November 2012

KUALA LUMPUR: The Malaysia Competition Commission (MyCC) is looking into the culling of 5 million layer chickens by farmers for any anti-competitive elements.

The culling has resulted in a shortage of egg supply and an immediate price increase of between 2 to 5 sen per egg.

"The Competition Act 2010 prohibits enterprises operating at the same level in the production chain to collusively agree to limit or control production of goods and services.

"This is deemed to have the object of significantly preventing, restricting or distorting competition in any market for goods or services," said MyCCchief executive officer Shila Dorai Raj.

The Star recently reported the Federation of Livestock Farmers Association of Malaysia's (FLFAM) layer unit chairman Yap Hoong Chaias saying that farmers typically cull about 10% of their older layer hens from each cycle (of one to three months, depending on the farm size) to make room for younger, more productive hens.

He added that however farmers have recently been culling up to 10% more hens to reduce production costs.

Dorai Raj said unilateral decision by a farmer to reduce his production for purposes of prudent costs management may not be an anti-competitive conduct.

"However, if it is done in agreement with other farmers, then this may be an infringement under the Competition Act 2010," she added.

Under the Act, if the farmers are found to have infringed the law, they may be imposed a penalty of not more than 10% of their worldwide turnover besides other remedial orders.

The MyCC, established in June 2011, is an independent body responsible for enforcing the Competition Act 2010, which was implemented to create healthy competition which would in turn stimulate productivity and innovation, thus creating wider choices of products for consumers with better quality and reasonable prices.

The Act applies to all commercial activities undertaken within and outside Malaysia that affects competition in the Malaysian market.

It provides a regulatory framework including powers to investigate, adjudicate and impose penalties on the perpetrators of the competition laws.

For more information on the Act and MyCC activities, log on towww.mycc.gov.my. - Bernama