Firms warned on market control
POULTRY COMPANIES should focus on one major business activity, or risk dominating the entire poultry industry
Business Competition Supervi-sory Commission (KPPU) member Munrokhim said his office was investigating alleged cartel practices in the poultry industry.
One possible way to avoid such practices is to allow poultry companies only to focus on one major business activity, he said.
“I think (the firms) need to sell their stocks to other investors so they don’t hold controlling stakes,” Munrokhim said on Monday.
Publicly listed poultry giants Charoen Pokphand and Japfa Comfeed, which dominates the country’s day-old-chicks and poultry feed markets, operate various poultry businesses engaged in both upstream and downstream operations.
Munrokhim made the statement in response to alleged cartel practices reportedly behind a free fall in the price of live birds.
The government and chicken breeders disagree, with the government believing that oversupply is behind the price slump.
Agriculture Ministry director-general of livestock Muladno said on Monday that the slump in the price of live birds was mainly due to excessive supply and that his ministry had taken appropriate measures to stabilise the price.
“The quickest way to prop up prices is through mass chicken culling by both small and big farmers,” he said.
It is estimated that parent stocks hit 30 million chickens, outstripping national demand by 50 per cent.
