The Bangladesh Competition Commission is set to prosecute six companies and four trade bodies for profiteering in the egg market, according to sources at the commission.
During an investigation, a team of the commission identified the companies and their related associations that have made extra profits by controlling the market through SMS, the sources added.
The sources familiar with the development said the process is underway to file a case against Kazi Farms, Paragon Poultry, Diamond Egg, Peoples Poultry and Hatchery, Naba Farms, United Egg Sale Point, Bangladesh Poultry Industries Central Council, Bangladesh Poultry Industries Association, Bangladesh Poultry Farm Protection National Council, and Poultry Professionals Bangladesh.
The case will be filed under the Competition Act.
"It has been decided to file a case against the companies and organisations found to have raised the prices of eggs through syndication," Md Hafizur Rahman, a member of the commission, told The Business Standard.
The organisations, however, denied the allegations.
"The state is suing us to avoid its responsibility," Khandkar Mohammad Mohsin, secretary general of the Bangladesh Poultry Industries Association, told TBS, raising the question, "Who will take responsibility for the 60,000 farms that have been shut down? Has anyone kept track of what happened there?"
Explaining the reasons for the rise in egg prices, Mohsin, who is also the owner of United Egg Sale Point, stated, "Thousands of chickens died due to the extreme heat, and continuous rains led to a decreased supply of fish. This period saw a surge in demand for eggs, but production remained below normal levels. As a result of this demand, prices increased."
In September 2022, the Competition Commission also filed a case against CP, Paragon, Kazi, Diamond Egg, and Tejgaon Egg Traders Association President Md Amanat Ullah due to the instability in the egg market. The case is still in progress.
In the middle of August, the price of eggs suddenly started to increase. The price of each dozen eggs jumped up to Tk170 from Tk145-148. In some places, eggs were even selling for Tk15 apiece.
After about a week of such volatility, the fisheries and livestock ministry announced the production cost of each egg at Tk10.50 and warned against selling eggs for more than Tk12 apiece at the retail level. As a result, the price gradually began to normalise.
At the time, egg producers and traders claimed that their production had decreased due to the closure of farms, but demand had increased. Due to the supply shortage, prices increased at the time. Daily egg production during normal times is 4.5–5 crore pieces, but during periods of instability, it fell below 4 crore pieces.
The Competition Commission sent a team of officials to investigate the cause of the sudden volatility in the egg market.
At the same time, the Directorate of National Consumer Rights Protection submitted an investigation report to the Commerce Ministry and the Competition Commission. In these two reports, it was found that manipulation by several organisations was behind the creation of instability in the egg market.
The Competition Commission's investigation found that the companies and their associations had colluded to inflate the prices of eggs. At the same time, the consumer rights directorate recommended that the Competition Commission take action against those who create obstacles to fair competition in the market, according to commission sources.
In a meeting, the commission also decided that effective legal measures are needed to prevent the alleged syndicates of the egg businesses and their associations.
On 20 August, the commission wrote to the fisheries and livestock secretary, inquiring whether the ministry has taken any action on charges of creating instability in the egg market. However, it has yet to receive a reply.
Besides, several recommendations have been given to the commerce ministry on market regulation. Among these, there is a need for citizen surveillance as well as authorities' vigilance on wholesalers and corporate groups to stop the manipulation of middlemen in the egg market.
The commission also recommended that consumers be involved in surveillance and monitoring activities. It is important to bring the activities of egg trade associations under accountability to stop the processes of syndicate, hoarding, and price fixing through SMS.