KUALA LUMPUR (Feb 11): The Competition Appeal Tribunal (CAT) has dismissed all appeals by four feedmillers challenging the Malaysia Competition Commission’s (MyCC) December 2023 decision to impose the largest fine in Malaysian history for price-fixing in the chicken feed industry.

The companies involved — Leong Hup Feedmill Malaysia, Dindings Poultry Development Centre, FFM Bhd, and Gold Coin Feedmills (M) Sdn Bhd — had sought to overturn MyCC’s ruling. Collectively five feedmillers, who commanded a 40% share of the market during the time of MyCC’s probe, were fined a total of RM415.5 million. The four feedmillers challenging the decision by MyCC were fined RM367 million.

The four had previously secured a High Court stay on the fine while their appeal was being considered.

Leong Hup Feedmill is owned by Bursa Malaysia-listed Leong Hup International Bhd (KL:LHI), Dindings Poultry by Malayan Flour Mills Bhd (KL:MFLOUR), while FFM is 80%-owned by PPB Group Bhd (KL:PPB).

All financial penalties and directions imposed by MyCC were upheld, including an aggravated penalty for one company that interfered with the investigation.

In a statement on Wednesday, MyCC said the tribunal agreed with it in that the companies had coordinated price increases on chicken feed, a key input in poultry farming, during three periods between January 31, 2020, and June 30, 2022. Such coordination directly affects the cost of producing chicken and the prices consumers pay.

The tribunal confirmed that MyCC had correctly applied the Competition Act 2010, under which agreements between competitors to fix prices are automatically considered harmful to competition.

It found that the penalties imposed on the feedmillers were within the legal limit and were appropriate, given the seriousness of the infringements.

MyCC said the tribunal also rejected the companies’ arguments that it had acted unfairly, without basis or in breach of due process, and, instead, confirmed that MyCC had conducted its investigation within its legal powers under the Competition Act 2010 and had complied with proper procedures throughout.

“This unanimous decision is a strong affirmation of MyCC’s role in protecting healthy competition in Malaysia. Markets function best when businesses compete honestly and independently. When competitors coordinate on prices, it harms the competitive process and can negatively impact consumers and the wider economy.”

“MyCC will continue to monitor the conduct of the companies involved as well as other players in the market in ensuring full compliance with the Competition Act 2010. MyCC remains committed to defending its decision in this case and to taking firm action against anti-competitive conduct to protect businesses and consumers in Malaysia,” MyCC chief executive officer Datuk Iskandar Ismail said.