Egypt: Egyptian Competition Authority publishes three prices

brief

This week, the Egyptian Competition Authority (ECA) launched three price-fixing cartel cases against 21 major table egg producers, including board members of the Table Egg Chamber of Commerce, which is affiliated to the General Union of Chicken Producers (“Cartel membersIn these cases, cartel members agreed on the selling prices of white and red eggs, in violation of Article 6 of the Egyptian Competition Law No. 3 of 2005. The Egyptian Competition Authority filed a criminal case against the cartel members with the Public Prosecution, but the case was not concluded.

The ECA press release states that cartel members agree on daily prices for white and red table eggs sold by farmers to traders/merchants. Such actions have led to excessive price increases of table eggs in the Egyptian market over the past period of time.

The Egyptian Egg Association found that at the end of each day, the Egg Chamber and the major farms negotiate the selling price of eggs for the next day. In addition, they share the daily selling price with market participants on the Facebook pages of the Chamber and the Union, as well as on separate pages for each geographical region in Egypt. In addition, the major producers also share the daily prices on their private pages in order to spread the new prices to all farms in Egypt.

More importantly, the ECA said it had gathered evidence that a senior member of the chamber encouraged members not to cooperate with the ECA and other regulators, and to destroy evidence and obstruct the ECA’s investigation.

Furthermore, the Egg Exporters Association argues that exchanging future pricing for table eggs violates Section 6 of the Egg Act which prohibits cartels.

We can get some inspiration from the above cases, including:

1. In recent years, the Export Competition Authority has significantly stepped up enforcement against cartels (horizontal agreements) by initiating a number of cases under Section 6 of the Export Control Act.
2. The ECA appears to have begun using its resources strategically. Most recently, the ECA issued a non-compliance decision regarding school uniform restrictions and launched a consumer campaign to raise awareness before the start of the new school year. Again, in this case, the ECA issued this important decision weeks before the start of the school year, when parents were particularly reliant on eggs for breakfast.
3. The export credit agency has confirmed its position prohibiting any discussion of future pricing.
4. Strategic goods with a direct impact on consumers appear to be high on the ECA’s priority list. Egypt’s enforcement efforts in the FMCG, medical/health and education sectors confirm this trend. Other strategic sectors, such as household appliances, are also on the rise. Please see our client alerts.
5. Obstructing an ECA investigation is a serious violation of the ECL. However, it is not clear whether senior members who attempted to obstruct the investigation were found to have violated the ECL and were issued a separate violation decision.

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