The Federal Competition and Consumer Protection Commission (FCCPC) made a startling revelation on Wednesday regarding how cartels in the poultry and packaging industries manipulate the market to maintain high prices despite various government interventions.
Tunji Bello, the EVC/CEO of the Commission, made the disclosure at a meeting of stakeholders in Uyo as part of the FCCPC’s nationwide campaign against market exploitative pricing.
Bello asserts that the poultry cartel, which is made up of large farmers, sets the price at which small farmers can sell their products.
The FCCPC boss stated that a day-old chick used to cost the small poultry owners between N480 and N590, and they still made money. But not after the arrival of two major market players. He didn’t reveal the names of the players.
According to him, the big players brought in a lot of money and expanded the market, and it was expected that they would soon control 80 to 90 percent of the city’s poultry market.
Industry captains, MSMEs, market leaders, farmers, transporters, service providers, and non-governmental organizations (NGOs) were among the packed audience.
Bello said the players used their clout and financial muscle to hijack the local poultry farmers association, dictating a day-old chick be sold at N1,350 in a curious reversal of the law of the economy of scale, which otherwise stipulates that the more you produce, the less the unit price.
Bello said that this was why, despite the government’s various support for the poultry industry, product prices remained high.
It is also said that through a variety of interventions, the Federal Ministry of Agriculture and Food Security has provided broiler chickens, vitamins, feed, and cash to poultry farmers across the nation’s six geopolitical zones in the past year.
This is also responsible for prices of poultry products soaring despite these factors.
Furthermore, findings reveal that starter mash price went up in price from N11,000 in October 2023 to N14,000 in January, N16,500 in March, N21,500 in July, and N23,500 in October.
Bello also said that this is the reason for the high prices of drinks in recyclable packs.
The five major players in the packaging industry are part of a cartel that imports and supplies local manufacturers with packaging materials.
Bello claims that they operate in a mafia-like manner such that if you choose to leave one of them to check the price of the other, the first seller would have tipped off the second seller to quote the same price before you reached the next factory.
Accordingly, Bello stated that the FCCPC chose dialogue as the first option “in the spirit of democracy” rather than enforcing the FCCP act.
The act prescribes harsh penalties ranging from heavy fines to jail terms.
Before ending his remarks, Bello urged the Akwa Ibom business community to work with the FCCPC to end exploitative pricing and clean up the markets.
He said Mr. President, Bola Tinubu has implemented a number of relief measures to cushion the harsh effects of ongoing economic reforms.
These measures include the removal of tariffs on food imports, VAT on pharmaceuticals and medical devices, tax exemptions for businesses and public transportation, and easy credit for vehicles that switch from gasoline to compressed natural gas (CNG).
The head of the FCCPC added, “It is only right that our traders and businessmen share such gains with consumers in the form of lower prices.”
