The Federal Competition and Consumer Protection Commission (FCCPC) on Wednesday accused cartels in the poultry and packaging industries of manipulating the market to keep prices high, despite various government interventions.
This was disclosed by the FCCPC via its X page, in what the Commission described as a “startling revelation” by its CEO, Mr. Tunji Bello, during a stakeholders’ meeting in Uyo, part of the FCCPC’s nationwide advocacy against exploitative pricing.
The FCCPC stated that its findings in Uyo were based on a nationwide investigation.
Price Fixing
According to the statement, Bello said a poultry cartel, made up of large operators, dictates the prices at which smaller players must sell their products.
“The small poultry owners used to sell a day-old chick for between N480 and N590, and they still made a profit. But after the arrival of two big players in the market, things changed. I choose to withhold their names for now.
“They (the big players) brought in substantial funds, expanded the market, and soon controlled 80 to 90 percent of the poultry market in the area,” Bello said before an audience of industry leaders, MSMEs, market representatives, farmers, transporters, service providers, and NGOs.
Bello stated that two unnamed major poultry players allegedly leveraged their financial power to dominate the local poultry farmers’ association, now setting the price of a day-old chick at N1,350.
Bello noted that this development contradicts the economic principle of economies of scale, which suggests that increased production should reduce unit costs.
“In the past year, the Federal Ministry of Agriculture and Food Security has supported poultry farmers with broilers, vitamins, feed, and cash through interventions across the nation’s six geopolitical zones.
“Despite these efforts, poultry product prices continue to soar. For example, starter mash, which sold for N11,000 in October 2023, rose to N14,000 in January this year, N16,500 in March, N21,500 in July, and N23,500 in October,” the statement partly reads.
More Insights
The FCCPC boss also highlighted that the high prices of beverages in recyclable packaging are largely due to “unfair pricing” set by a cartel in the packaging sector.
“The cartel in the packaging sector consists of five major players who supply packaging materials to local manufacturers. They operate in a mafia-like manner, so if you attempt to get a price check from a competitor, the first seller tips off the second to quote the same price,” Bello explained.
- Regarding delays in penalizing offenders, Bello said the FCCPC prefers dialogue as a first approach, rather than imposing harsh penalties like heavy fines or jail terms.
- He urged Akwa Ibom’s business community to work with the FCCPC to curb exploitative pricing and to help regulate market practices.
“It is only fair that our business people share their gains with consumers in the form of reduced prices,” Bello added.
- According to the statement, Bello said President Bola Tinubu has introduced several relief measures, including the removal of tariffs on food imports, VAT exemptions on pharmaceuticals and medical devices, and tax waivers for businesses and public transportation to mitigate the effects of ongoing economic reforms.
He also mentioned the availability of easy credit for converting vehicles from petrol to CNG as part of the federal government’s policy reforms.