The Competition Commission of Pakistan (CCP) has imposed a penalty worth Rs44 billion on the Pakistan Sugar Mills Association (PSMA) for the violation of the Competition Act 2010.
The penalty issued on Friday to the PSMA is the highest penalty ever imposed by the CCP.
In a statement, the CCP said that the PSMA has been directed to pay the penalty within two months, adding that the decision was taken against it over a violation of the Competition Act 2010 for fixing the sugar price, which was proved during an investigation conducted by the CCP.
The statement added that the sugar mills, under the PSMA, obtained the quota of utility stores and imported sugar through a nexus.
“As per the Commission’s majority decision, PSMA and the Punjab sugar mills have been found to have shared commercially sensitive stock information amongst themselves in violation of Section 4 of the act,” it said.
The statement also said that it was observed in the order that given the peculiarities of the sugar sector, it makes such stock information highly sensitive and critical, adding: “Such information would allow mills to assess and coordinate on future sales volumes and pricing strategies, effectively distorting competition in an already highly regulated market.”
The commission also found that such information was not publicly available given that it was mill-specific, shared frequently and in real-time/on fortnightly basis.
The notification read that two of the CCP members gave a dissenting opinion over the commission’s decision, whereas the chairman and another member voted for issuing a penalty to the PSMA.
However, the CCP chairman voted again in favour of the decision over a tie in the votes.
Last year, a sugar crisis had occurred in the country, due to which the sugar prices had skyrocketed. The CCP investigated the matter and issued notices to several sugar mills.
Once the Sugar Inquiry Commission submitted its report, the CCP was asked to investigate the issues related to cartelisation and anti-competitive measures in the sugar industry.
On the other hand, the PSMA rejected the inquiry commission’s report, which was made public and explained how the price of sugar was fixed, how exports of the commodity were faked on sales taxes, and how billions of rupees were overcharged by sugar mills owners.
The PSMA alleged that the commission “distorted the facts” in its report presented to Prime Minister Imran Khan and the federal government.
