Eight chicken suppliers in Singapore get reduced penalties after successful appeal

EIGHT distributors of fresh chicken had their penalties reduced upon appeal for their roles in a case of price-fixing and non-competition agreements involving 13 traders and distributors.

The parties made a total of four appeals to the Competition Appeal Board, after the Competition and Consumer Commission of Singapore (CCCS) in 2018 meted out a total financial penalty of S$26.9 million to the parties involved, the largest amount of financial penalty in a single case to date.

An investigation that began in March 2015 found that the companies infringed anti-competition laws by coordinating price increases for their products and agreeing not to compete for one another's customers. Altogether, the distributors involved supply more than 90 per cent of fresh chicken products in Singapore.

Following hearings by the board in August and September 2019, the penalties for the four appeals were reduced and ranged from S$513,992 to S$9.1 million, according to the written decision seen by The Business Times.

For three of the appeals, the reduced penalties were about 70 per cent less than the original penalties, which ranged from S$1.8 million to S$2.3 million. The reduced penalty of S$9.1 million for the fourth appeal, involving four distributors led by Lee Say Group, was about 20 per cent less than the original penalty of S$11.4 million.

The penalties were to be paid within 14 days from the date of the decision, Dec 4, 2020, after which interest at the rate of 4 per cent per annum would be payable on the unpaid penalties until full payment was made.

The appeals were filed against the quantum of financial penalties and CCCS's findings that the parties had participated in anti-competitive behaviour. One appeal was filed by Gold Chic Poultry Supply and Hua Kun Food Industry. Another was filed by Lee Say Poultry Industrial jointly with its sole proprietor Lee Say Group, Hup Heng Poultry Industries, Leong Hup Food (formerly KBS Distribution) and its holding company ES Food International, and Prestige Fortune (S). The other two appeals were filed separately by Toh Thye San Farm and Ng Ai Food Industries (formerly Ng Ai Muslim Poultry Industries).

A fifth appeal filed by Kee Song Food Corporation against the quantum of financial penalty imposed on it was dropped after Kee Song reached an agreement with CCCS on the quantum payable at an earlier stage of the hearing.

The remaining four parties who did not file appeals had earlier applied for leniency in exchange for information on the cartel activity.

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