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Mexican Government Investigates Poultry Sector

20 January 2010

USDA Foreign Agricultural Service

MEXICO - The Mexican government has started an investigation into possible monopolist business practices in the poultry sector according to Zaida San Juan and Daniel R. Williams II in a GAIN report from USDA Foreign Agricultural Service.

Current information available to Mexico's Federal Commission of Economic Competition (CFC) has been sufficient to initiate, the investigation into possible monopolistic practices as defined by the Law of Mexican Economic Competition (LMEC) within the Mexican poultry sector.

The investigation will examine contracts, business arrangements, agreements or a combination of the three for companies within the Mexican poultry sector, especially for those practices which affect poultry market prices.

The announcement allows for any company to contribute to the investigation. The Mexican poultry sector is very concentrated, as three companies account for 55 per cent of all Mexican chicken production. Two of the three are US firms, and could be asked to provide information for the investigation.

Despite the sector being highly concentrated within three companies, small and medium companies, along with supermarkets, could influence the investigation, which could result in sanctions for the entire sector.

The USDA report says that at this time, no US poultry exports will be affected as a result of this investigation. The investigation is focused on the domestic market; however, there is a small possibility that CFC may seek information from US exporters.

FAS-Mexico said it will continue to monitor the investigation for any changes which may occur during the investigation.

The investigation officially began on 17 December 2009, and will take between 30 to 120 days to complete, but this time-frame could be extended four times if necessary.

TheMeatSite News Desk

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