In brief
Following two years of investigation, this week the Public Prosecution Office referred seven poultry brokers to the Economic Misdemeanor Court on charges of participating in a price fixing cartel in the poultry brokerage market in Egypt, in violation of Article 6 of the Egyptian Competition Law No. 3 of 2005 (“ECL”).
In May 2024, the Egyptian Competition Authority (ECA) initiated criminal proceedings of this case before the Public Prosecution against seven major poultry brokers for engaging in a price‑fixing cartel.
In more detail
The ECA investigated the white poultry market and found that the market structure consists of three main levels: breeders, brokers, and traders, where the ECA found that seven brokers engaged in agreements to fix and determine the prices in the poultry market.
Further, the brokers coordinated the daily pricing of live poultry sold from farms by announcing prices on a daily basis via social media platforms through what are commonly referred to as unofficial “Poultry Exchange.” These announcements were intended to inform other brokers and market participants of the daily prices.
Moreover, the investigations revealed the existence of a parallel pricing announcement pattern among the brokers’ prices. This pattern could not have been explained by the variations in transportation costs or geographic location of the brokers. Moreover, the Prosecutor's Office determined that there was a strong price correlation between those pricing announcements. As a result, this was interpreted as evidence of prior coordination between the brokers to determine selling prices, whether through increase, decrease, or price fixing. Moreover, the Prosecutor's Office noted that it has relied as well on a number of testimonies.
Following its investigations, the Public Prosecution decided to prosecute these brokers before the Court for violating Article 6 of the ECL.
Conclusion and main takeaways
A number of takeaways can be noted from the above cases, including the following:
- It is clear from the ECA's enforcement practice that once it enters a market it investigates the related markets within the same sector. Please refer to our previous Client Alerts of chicken boiler case and table eggs case.
- The ECA’s enforcement focus on strategic good market that affect the consumers seems to be a priority, including, among others, food and health.
- The case confirms that the ECA enforces the law on formal and informal economies which is a very welcomed approach.
- The Prosecutor's Office seems to be more willing to accept relying predominantly on circumstantial evidence to establish a cartel. It is not clear whether any direct evidence has been obtained in this case.
Logaine El Shafie, Associate, has contributed to this legal update.