Egyptian Competition Authority Charges 21 Poultry Producers With Price Fixing In Egg Market

(MENAFN- Daily News Egypt) The Egyptian Competition Authority has filed criminal charges against 21 major egg producers, accusing them of colluding to fix prices in violation of the country's competition law.

The authority's board of directors decided to refer the case to the Public Prosecution after concluding that the producers had engaged in three separate horizontal agreements to set prices for both white and red table eggs.

The accused, all members of the Egg Division of the General Union of Poultry Producers, including members of the Division's board, were found to have colluded on a daily basis to determine the sale price of eggs from farms to traders.

The authority's investigation revealed that this agreement resulted in inflated egg prices, which did not reflect the actual costs of production, for an extended period of time. This, the authority stated, was done to achieve higher profit margins at the expense of Egyptian consumers, while hindering the free market mechanisms of supply and demand that should govern pricing for each individual farm.

The Egyptian Competition Authority further found that the producers had conspired to undermine government initiatives aimed at reducing consumer hardship by providing incentives to the private sector to improve economic efficiency and lower costs, which would ultimately result in lower prices for consumers.

“Horizontal agreements (cartels) are one of the most serious competition offences, as they disrupt the free market mechanisms of supply and demand,” stated the authority.

“In a free market, each economic entity is expected to make decisions independently without being influenced by other entities, however, in this type of crime, competing entities collude to fix prices, disrupting competition between them and ensuring high profit margins. Price-fixing agreements are considered one of the worst types of agreements as they come at the expense of the consumer, who should be able to benefit from competition by obtaining the best goods at the lowest prices.”

The authority's investigation revealed that the Egg Division would communicate with major farms at the end of each day to determine the selling prices for white and red eggs for the following day. These agreed-upon prices would then be communicated to market players by a representative of the General Union of Poultry Producers, serving as a liaison between all market participants.

This was done through social media channels, including Facebook pages belonging to the division and union, as well as social media groups for each region across the country.

Major producers also posted the prices on their own social media pages to ensure that all farms across the country were aware of the agreed-upon prices. The producers were found to have implemented a systematic approach to gradually increasing prices, regardless of supply and demand dynamics, taking advantage of market conditions and economic circumstances to further burden consumers.

The investigation also found that the producers had encouraged each other to raise prices, exploiting the government's recent increase in salaries and annual bonuses for employees. One high-ranking member of the Egg Division was also found to have pressured farm owners to avoid cooperating with regulatory authorities, attempting to conceal evidence and obstruct the investigation process.

The evidence collected by the Egyptian Competition Authority revealed that the producers were sharing future price-setting plans, with the aim of controlling the market and unifying prices from farms to traders across the country. This Effectively eliminated competition between farms, resulting in uniform prices regardless of farm size or location, ensuring continued profit and eliminating any competitive threats.

This practice ultimately harms consumers by forcing them to purchase products at artificially inflated prices due to the lack of competition in the market.

The Competition Authority underscored that the egg market had witnessed serious violations in recent times and that these individuals had exploited consumers' circumstances to agree on price increases. The authority stated that this agreement was legally and ethically reprehensible.

The authority emphasised the need for the General Union of Poultry Producers and the Egg Division to comply with the law and prevent such legally harmful practices.

It stressed that its role is to safeguard the collective interests of its members, protect and increase poultry wealth, foster investment in related activities, and develop production and manufacturing methods.

The Egyptian Competition Authority asserted that it is unacceptable for such a body to engage in monopolistic practices that harm the market, violate consumer rights, and increase consumer burdens. It further emphasised that it will not tolerate such violations and will continue to monitor and track the actions of market participants, ensuring the prevention and cessation of any such violations.

The authority affirmed its continued efforts to monitor and combat monopolistic practices, particularly in markets and sectors that directly impact consumers and affect the people's food security.

The aim is to ensure that market participants do not manipulate the market or exploit economic conditions to engage in practices that violate the law, resulting in price increases and increased burdens on consumers. The authority is monitoring all sectors and markets and will announce the findings of its investigations in some of these areas in the coming period. It urged citizens to promptly report any violations of the law.

The Egyptian Competition Authority appealed to anyone involved in such harmful practices that undermine competition to report the situation and take advantage of the exemption provided in Article 26 of the Law on the Protection of Competition and the Prevention of Monopolistic Practices.

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