Source: Competition Commission swoops on day- old chicks suppliers | Sunday News (Business)
Judith Phiri, Business Reporter
THE Competition and Tariff Commission (CTC) has issued orders against three companies following complaints from small-scale farmers alleging that the outlets were selling chicks only if one buys all the feed required to raise the birds.
Competition and Tariff Commission (CTC)
The three companies namely, Nova Feed, Feedmix and Gain Cash and Carry have been told to submit compliance programmes to the Commission within six months of issuance of the orders.
In its latest newsletter for the first quarter of 2022, CTC said the orders were issued after it conducted a market research following complaints raised by small-scale farmers.
“During conducting a market research, the Commission noted that the Nova Feed, Feedmix and Gain Cash and Carry were making the sale of broiler day-old chicks conditional upon buying a particular number of stock feed bags. Complaints were also received from small-scale farmers alleging that these outlets were selling chicks only if one buys all the feed required to raise the birds,” said CTC.
Feedmix
It said this was termed tied or conditional selling as provided in Section 2 of the Competition Act and such a business practice or arrangement enhances the price of day-old chicks as the farmer has limited choice on stock feed suppliers to buy from.
“This business practice is also detrimental to other stock feed distributors as it denies them access to customers in that they do not have day-old chicks or are not able to supply bundled products of day-old chicks and stockfeed.
From the investigation, it was noted that this was a marketing practice which inhibited competition.
“Some of the firms denied that they were conditionally selling citing that they were discouraging customers to buy day-old chicks and stock feeds under one roof.
However, the Commission noted complaints from broiler farmers alleging that these firms were selling day-old chicks on the condition that one buys feed,” added the Commission.
It said the practice was mainly noticeable during times of crisis which include during disease outbreaks such Avian Influenza, and acute or pronounced shortages in the market when demand outweighs supply of day-old chicks such as during the festive season.
The Commission said though some of the firms denied the practice proclaiming that these were actions instituted by salespeople without the knowledge of the executives, it negotiated with the firms involved to ensure discontinuance of the practice that existed or that could come into existence.