The Federal Competition and Consumer Protection Commission, or FCCPC, made a shocking disclosure Monday about how cartels in the packaging and poultry sectors control the market to maintain high pricing in spite of various government actions. In keeping with the agency’s national campaign against market exploitation, Mr Tunji Bello, the commission’s executive vice chairman and CEO, revealed this at a stakeholders’ meeting in Uyo, Akwa Ibom State.
Similar events have previously been held by FCCPC in a number of federation states. Bello claims that the poultry cartel, which is made up of large holders, sets the prices at which smallholders must sell their goods.
“The small poultry owners used to sell a day-old chick for between N480 and N590 and they still made a profit,” the FCCPC head stated, revealing the commission’s findings in one of the major cities. But not after two major players entered the market. At this stage, I decide not to reveal their identities. “They (the major players) brought in a lot of money and grew the market, and naturally, they soon had 80 to 90 percent of the city’s poultry market.”
In a curious reversal of the law of the economy of scale, which states that the more you produce, the lower the unit price, he claimed that the two major poultry companies “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.”
Bello claimed that this was the reason why, in spite of the government’s many subsidies for the poultry sector, product prices stayed high. Through a variety of initiatives nationwide over the past year, the Federal Ministry of Agriculture and Food Security has provided poultry producers with broilers, vitamins, feeds, and money.
Starting mash, for example, increased in value from N11,000 in October 2023 to N14,000 in January of this year, N16,500 in March, N21,500 in July, and N23,500 in October. He added that “unfair pricing” set by a cartel in the packaging industry was a major factor in the high costs of drinks in recyclable packaging.
According to him, the packaging industry cartel is made up of five major companies that import packaging materials and supply them to regional producers. “They function in a mafia-like manner, so if you decide to leave one of them to check the price of the other, the first seller would have tipped off the second seller to quote the same price before you would reach the next factory.”
He explained that the FCCPC selected discussion as the first course of action “in the spirit of democracy” rather than executing the FCCPC Act, which stipulated severe penalties ranging from jail sentences to huge fines, as the reason why individuals involved in such savage activities had not been punished. He urged Akwa Ibom State’s business community to work with the FCCPC in order to sanitise the markets and stop exploitative pricing.
According to Bello, President Bola Tinubu has implemented a number of relief measures to lessen the harsh effects of ongoing economic reforms.
These include the elimination of import duties on food, the removal of VAT on pharmaceuticals and medical devices, tax breaks for businesses and public transportation, and the provision of easy credit for the conversion of gasoline-powered vehicles to CNG. Bello stated: “It is only right that our traders, businesswomen, and entrepreneurs give these profits to customers in the form of lower prices.”
