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Mexican Govt Investigates Poultry Sector

by 5m Editor
20 January 2010, at 8:02am

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

Report highlights

On 17 December 2009, Mexico's Federal Commission of Economic Competition (CFC) published a notice announcing an investigation of the Mexican poultry sector regarding possible monopolistic business practices. At this time, no specific companies have been cited as conducting business in this manner. However, the findings could affect US companies that have invested in the Mexican poultry sector.

Introduction

This report summarises the official announcement published in Mexico's 'Diario Oficial' (Federal Register) on 17 December 2009, in which Mexico's Federal Commission of Economic Competition (CFC) announced an investigation of the Mexican poultry sector.

Disclaimer: This summary is based on a cursory review of the announcement and therefore should not, under any circumstances, be viewed as a definitive reading of the regulation in question, or of its implications for US agricultural export trade interests. In the event of a discrepancy or discrepancies between this summary and the complete regulation or announcement as published in Spanish, the latter latter shall prevail.

FAS/Mexico's Executive Summary

Current information available to CFC is sufficient to initiate, within the Mexican poultry sector, an investigation into possible monopolistic practices as defined by the Law of Mexican Economic Competition (LMEC). 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.

FAS/Mexico analysis

This 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.

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 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.

GOM information

Mexico's Federal Commission of Economic Competition (CFC) can be found by clicking here and Mexico's equivalent of the Department of Commerce (SE) can be found by clicking here. These web sites are mentioned for the readers' convenience but USDA does not endorse, guarantee the accuracy of, or necessarily concur with the information contained on those sites.

Further Reading

- You can view other GAIN reports from the USDA Foreign Agricultural Service by clicking here.