CCS Issues Supplementary Proposed Infringement Decision Against 13 Fresh Chicken Distributors in View of Fresh Evidence

21 December 2017

1. The Competition Commission of Singapore (“CCS”) has today issued a Supplementary Proposed Infringement Decision (“SPID”)^{^[1]} against 13 fresh chicken^{^[2]} distributors (“the Parties”)^{^[3]} for engaging in anti-competitive agreements^{^[4]} to coordinate the amount and timing of price increases, and agreeing not to compete for each other’s customers in the market for the supply of fresh chicken products in Singapore. The SPID is issued following further investigations conducted, in view of new evidence after the Proposed Infringement Decision (“PID”) was issued against the Parties on 8 March 2016.

CCS’s investigations

2. In March 2014, CCS commenced its investigation into the fresh chicken distribution industry after it received a complaint on the alleged anti-competitive conduct. On 8 March 2016, CCS provisionally found that the Parties who are in the business of trading in or distributing fresh chicken products had engaged in discussions, from at least 2007 to 2014, on prices and also expressly coordinated the price increases of certain fresh chicken products^[5] sold in Singapore (“Price Increases”). During these meetings, the Parties had also agreed to not compete for each other’s customers (“Non-Aggression Pact”).

3. Both the Non-Aggression Pact and the Price Increases were aimed at distorting the prices of certain fresh chicken products in Singapore. By agreeing not to compete for each other’s customers, the Parties restricted the choices available to customers. The coordinated price increases further reduced customer choice as it provided few options for customers to switch distributors. The Non-Aggression Pact and Price Increases simultaneously created a less competitive landscape. As such, the implementation of the agreed price increases impacted a significantly large number of distributors and customers including supermarkets, restaurants, hotels, wet market stalls and hawker stalls, and ultimately consumers of these chicken products.

4. Following the issuance of the PID against the Parties on 8 March 2016, new evidence involving allegations of fact and admissions were brought to the attention of CCS during the course of the Parties’ written and oral representations to the PID. As a consequence, CCS formally notified the Parties on 27 September 2016 that further investigations would be conducted. Subsequently, CCS received applications by the Parties for lenient treatment under CCS’s Leniency Programme^[6]. The purpose of the SPID allows the Parties to address the new evidence that has arisen since the issuance of the PID. The Parties have six weeks to make their representations to CCS in relation to the SPID. CCS will then make its final decision, after careful consideration of the representations, as well as all available information and evidence.

5. Under the Competition Act, business entities should not enter into any agreement or arrangements that prevents, restricts or distorts competition. They should, instead, independently determine their responses to competition.

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About The Competition Commission of Singapore (CCS)

CCS is a statutory board established under the Competition Act (Chapter 50B) on 1 January 2005 to administer and enforce the Act. It comes under the purview of the Ministry of Trade and Industry. The Act empowers CCS to investigate alleged anti-competitive activities, determine if such activities infringe the Act and impose suitable remedies, directions and financial penalties.

For more information, please visit www.ccs.gov.sg.

For media clarification, please contact:

Ms. Grace Suen
Senior Assistant Director
International and Strategic Planning Division
Competition Commission of Singapore
Email: grace_suen@ccs.gov.sg
DID: 6325 8216 / 9835 8601

Ms. Loy Pwee Inn
Senior Assistant Director
International and Strategic Planning Division
Competition Commission of Singapore
Email: loy_pwee_inn@ccs.gov.sg
DID: 6325 8313

^[1] The SPID sets out the facts and evidence on which CCS makes its assessment and its reasons for arriving at the proposed decision.

^[2] “Fresh chicken” refers to chickens that are slaughtered in Singapore, as opposed to frozen chickens imported into Singapore.

^[3] The Parties are listed in the Appendix 1.

^[4] Agreements, decisions and concerted practices which prevent, restrict or distort competition are prohibited under section 34 of the Competition Act. Examples of anti-competitive agreements include market sharing and price fixing agreements. Market sharing refers to competitors agreeing to divide/allocate the market by not competing for one another’s customers. Price-fixing involves competitors agreeing to fix, control or maintain the prices of goods or services.

^[5] These products include whole fresh chickens, whether cut or not, but excluding black chickens, kampong chickens, speciality chickens of the Parties, marinated or cooked chickens and chicken parts.

^[6] Please refer to Appendix 2 for more information on CCS’s leniency programme.