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January 21, 2021

Charge of cartelisation: CCP starts hearings against PSMA, 84 mills

National

January 21, 2021

ISLAMABAD: After finding out cartelization for fleecing consumers established through an inquiry, the Competition Commission of Pakistan (CCP) has kick-started hearings against the Pakistan Sugar Mills Association (PSMA) and 84 mills for ascertaining the veracity of allegations in violation of Section 4 of the Competition Act 2010.

According to an official announcement made here on Wednesday, the CCP has on 7th January 2021 commenced hearings in the proceedings against the PSMA and 84 member mills for prima facie cartelization, in violation of Section 4 of the Competition Act 2010.

The hearings were held on 7th, 8th, 11th, 15th and 20th January 2021 respectively and the CCP has so far heard the PSMA and 40 sugar mills through their respective counsels.

The matter was initially fixed for hearing on 20th, 24th and 25th November 2020; however, owing to respondents’ requests, adjournments were granted on various grounds.

Finally, the first round of hearings are underway with counsels raising their preliminary objections before the bench of CCP. Owing to importance of the matter, a full bench of CCP comprising Chairperson Ms Rahat Kaunain Hassan and Members Ms Shaista Bano, Ms. Bushra Naz Malik and Mujtaba Lodhi is hearing the matter.

The PSMA and its members are being provided with an opportunity of hearing to plead their cases with reference to the prima facie violations indicated in their

respective Show Cause Notices (SCN) issued in November 2020. As per the enquiry report of the CCP, PSMA and 84 sugar mills have been found to be in prima facie violation of the Act of 2010 by controlling domestic stocks/supplies through the determination of export quantities, creating zonal divisions in Punjab to coordinate on sales, stock positions and production quota to monitor and control quantity to be sold.

It was also found that the PSMA’s platform in the Punjab Zone was used to share sensitive commercial stock information having a direct bearing on current and future prices of white refined sugar. Furthermore, certain mills are alleged to have used the PSMA’s platform to take a collective decision to divide amongst themselves the quantity of sugar to be supplied for two USC tenders.

Another allegation is that 15 mills in the Punjab Zone collectively decided to cease crushing activity from 30th December 2019 to 11th January 2020.

Further hearings in the matter are scheduled in the following weeks. The bench of CCP will pass an order after hearing the respondents’ pleading in the matter.