 says it has found that powerful cartels in Nigeria’s poultry and packaging sectors are deliberately manipulating market prices to keep costs high as Nigerians face their worst cost-of-living crisis triggered by severely harsh government policies.){kind=link}
The Federal Competition and Consumer Protection Commission (FCCPC) says it has found that powerful cartels in Nigeria’s poultry and packaging sectors are deliberately manipulating market prices to keep costs high as Nigerians face their worst cost-of-living crisis triggered by severely harsh government policies.
The disclosure was made on Wednesday by the FCCPC’s Executive Vice Chairman and CEO, Tunji Bello, during an advocacy meeting in Uyo, Akwa Ibom State. The session was part of the FCCPC’s nationwide campaign against exploitative pricing practices.
According to Mr Bello, a nationwide FCCPC investigation found that two major companies within the poultry industry dominate nearly 90% of the market, using their influence to dictate prices and practices across the supply chain.
Smaller poultry operators, who once sold a day-old chick for between N480 and N590, have been pressured to charge a fixed price of N1,350, determined by the dominant players.
“The small poultry owners used to sell a day-old chick for between N480 and N590 and still made a profit. But not after the arrival of two big players in the market,” Mr Bello explained.
“I choose to withhold their names at this point. They brought in big money and expanded the market and soon were in a position to control 80 to 90 percent of the poultry market in the city.”
Addressing an audience at the Villa Hilton Hotel, Mr Bello noted that these two players “used their clout and financial muscle to hijack the local poultry farmers’ association and now dictate 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 you produce, the less the unit price.”
The manipulation, he claimed, explains why poultry product prices have remained high despite government support.
According to him, the Federal Ministry of Agriculture and Food Security has in the past one year provided subsidies to poultry farmers nationwide, offering broilers, vitamins, feeds, and financial aid.
Yet, prices continue to rise. Starter mash, for example, sold for N11,000 in October 2023, increased to N14,000 by January 2024, N16,500 in March, N21,500 in July, and hit N23,500 in October.
No Sanctions
The FCCPC also identified pricing manipulations within the packaging sector, where a five-member cartel has reportedly dominated pricing for packaging materials used in food and beverages.
“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 would reach the next factory, the first seller would have tipped off the second seller to quote the same price,” Mr Bello said.
On why those engaged in such sharp practices have not been sanctioned, Mr Bello said that FCCPC chose dialogue as the first option “in the spirit of democracy” instead of enforcing the FCCP act which prescribes stiff penalties ranging from heavy fine to jail terms.
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