Antitrust watchdog says monitoring sugar crisis

ISLAMABAD: The Competition Commission of Pakistan (CCP) has said action against the sugar mafia is facing stay orders by High Courts in Sindh and Punjab, so penalties of Rs44 billion could not be recovered.

The CCP’s statement issued here on Thursday stated that the CCP is monitoring the ongoing sugar crisis in the country. It will take appropriate enforcement and policy actions if any indications of anti-competitive activities are found.

The statement highlighted that the CCP carried out raids on the Pakistan Sugar Mills Association (PSMA) in 2021 and imposed substantial penalties of Rs44 billion on PSMA and its member sugar mills for cartelization.

But the CCP’s decision was appealed against in the High Courts of Sindh and Punjab, and in the Competition Appellate Tribunal (CAT) where eventually recovery of penalties was stayed.

The Appellate Tribunal has been dysfunctional since July 14th, 2023 due to the expiry of the term of its chairman whilst cases of sugar mills and similar important cases are pending.

It is important to note that CAT has remained dysfunctional for 7.5 years since 2010, leading to a huge backlog of cases. The sooner the government appoints its chairman, the quicker the Appellate Tribunal can finalise the appeals.

The CCP has taken proactive measures against cartelization in the sugar sector, demonstrating its commitment to ensuring fair competition. Whilst CCP acknowledges the due legal processes associated with judicial review, expediting the resolution of cartel cases is crucial for delivering effective relief to consumers. Protracted delays in resolving cartel cases will negatively impact both consumers and the overall economy.

It is important to realize that cartelization, market abuse, and abuse of dominance prevent new entrants in the industry and discourage foreign investment. The lack of competition results in higher prices for consumers. The CCP is fully cognizant and vigilant in safeguarding consumers and promoting fair competition, the statement concluded.