KUALA LUMPUR (Dec 21): The Malaysia Competition Commission (MyCC) has warned that it will take a firm stance against associations that openly announce price hikes, minimum pricing or new trading conditions, particularly through the media.

The commission said certain associations have announced such moves, especially those in the essential sectors such as transportation, care services, healthcare and food.

“Such announcements may constitute anti-competitive agreements or cartel activities, as they reflect decisions made by association committee members who are competitors in the same industry. These announcements can also serve as signals to association members, encouraging coordinated participation in cartel practices,” MyCC chairman Tan Sri Idrus Harun said in a statement on Saturday.

While acknowledging the rising business costs globally and domestically, he stressed that businesses must not resort to collusion as a solution.

“Actions such as coordinating price increases, minimum prices or imposition of new trading conditions that further burden consumers are prohibited. Such decisions should be made independently, without directives or influence from associations. Businesses cannot use their roles or memberships in associations as a shield to legitimise their cartel behaviours,” he added.

Idrus said it has conducted numerous investigations into associations, including committee members and association members, and has found that they used association platforms to encourage the formation of cartels among themselves.

Notably, financial penalties amounting to RM415.5 million were imposed on five poultry feed producers for colluding in a “chicken feed cartel” to fix poultry feed prices. This is the largest fine that the quasi-judicial body has imposed in its 12-year history.

Of the five poultry feed players, three are Bursa Malaysia-listed companies, namely Leong Hup International Bhd (KL:LHI), operating via wholly owned subsidiary Leong Hup Feedmill Malaysia Sdn Bhd, Malayan Flour Mills Bhd (KL:MFLOUR) via partially-owned Dindings Poultry Development Centre Sdn Bhd, and PPB Group Bhd (KL:PPB) through 80%-owned FFM Bhd.

The other two feedmillers are Gold Coin Feedmills (M) Sdn Bhd under Gold Coin Group and PK Agro-Industrial Products (M) Sdn Bhd under Charoen Pokphand Holdings (M) Sdn Bhd, which in turn is a subsidiary of Thai conglomerate Charoen Pokphand Group Co Ltd.

Idrus highlighted that some associations, through their leaders, attempt to mislead the public by claiming that the price increase announcements are merely projections for the future or price guidelines when in fact these announcements are cartel-like decisions made by the associations.

“MyCC is also aware that some associations even attempt to conceal their decisions, believing these actions will go unnoticed despite their clear violation of competition laws.”

He added that enforcement efforts will continue to target any enterprise, regardless of size, involved in cartel activities.

“The upcoming amendments to the Competition Act 2010, set to be tabled early next year, will enhance MyCC’s investigative and enforcement powers, enabling stricter action against economic sabotage activities by cartels, in particular harsher penalties.”

Reports can be lodged via MyCC’s official website at https://www.mycc.gov.my/en/complaints or via email at complaints@mycc.gov.my for any suspected attempts or actions leading to cartel formation. 

https://www.theedgemarkets.com/node/738606