Nigerian poultry, packaging cartels drive prices up – FCCPC

Cartels in Nigeria’s poultry and packaging industries are driving prices up by manipulating the market, the head of the Federal Competition and Consumer Protection Commission (FCCPC) said on Wednesday.

Speaking at a stakeholders’ meeting in Uyo, FCCPC’s Chief Executive Officer, Tunji Bello, outlined how powerful players in the poultry industry fix prices to control market rates, forcing smaller sellers to charge higher amounts.

Mr Bello said despite government support measures intended to reduce costs, prices remain high due to cartel activities.

According to him, the poultry cartel consisting of big holders dictates the price for the smallholders to sell their products.

“The small poultry owners used to sell a day-old chick for between N480 and N590 and they still made a profit. But not after the arrival of two big players in the market. I choose to withhold their names at this point.

“They (big players) brought in big money and expanded the market, and expectedly, they were soon in a position to control 80 to 90 per cent of the poultry market in the city,” he said.

He said two particular big poultry players“used their clout and financial muscle to hijack the local poultry farmers association and now dictated that 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 the production rate, the less the unit price.

The FCCPC investigation found that this price manipulation effectively negates the benefits of government subsidies, which include broilers, vitamins, feeds, and financial aid aimed at stabilising the poultry sector.

He said the Federal Ministry of Agriculture and Food Security, in the last year, has supported poultry farmers with broilers, vitamins, feeds and cash through various interventions across the nation’s six geopolitical zones.

Despite these, prices of poultry products have continued to skyrocket.

The cost of essential poultry feed continues to escalate, with starter mash rising from N11,000 in October 2023 to N14,000 in January this year, N16,500 in March, N21,500 in July and N23,500 in October.

Mr Bello said the packaging industry is also facing similar issues, with a cartel of five key players in the packaging material supply chain operating in a “mafia-like” manner.

“The cartel in the packaging sector consists of five big players who are in the business of importing and providing local manufacturers with packaging materials. They operate in a mafia-like fashion such that if you choose to leave one of them to check the price of the other before you reach the next factory, the first seller would have tipped off the second seller to quote the same price,” he lamented.

Mr Bello urged Akwa Ibom’s business community to partner with the FCCPC in fighting exploitative pricing. Although penalties for price-fixing are possible under the FCCP Act, he noted that the commission is prioritising dialogue to encourage fair practices.

He also highlighted recent measures introduced by President Bola Tinubu to ease the effects of economic reforms, including tax waivers for food imports and medical devices, public transport tax relief, and accessible credit for converting petrol vehicles to compressed natural gas (CNG).

“It is only fair that our businessmen and businesswomen and traders share such gains with consumers in the form of reduced prices,” Mr Bello said.