MCA investigating packaged milk price hike

The Monopoly Control Authority (MCA) has initiated inquiry into the pre-budget price hike in packaged milk products. Sources told Business Recorder on Tuesday that the MCA has fixed hearing of packaged milk companies on July 2 and 3 to ascertain the reasons behind the pre-budget price increase.
The authority has initiated inquiry under section 14 of the Monopolies and Restrictive Trade Practices (Control and Preventive) Ordinance, 1970. Under section 14 (Special inquiry), "the authority may, on its own, and shall upon a reference made to it by the Central Government, conduct special inquiries into any matter relevant to the purposes of this Ordinance".
The inquiry would help the MCA to identify circumstances that led to increase in prices of milk products. The special inquiry would analyse the cartel behaviour to ascertain reasons behind collective increase, the sources said. The increase in prices of Tetra Pack products would be examined to check if it was manipulated.
The authority has initiated action on a report that manufacturing companies, especially those dealing in consumer goods like milk have made "strategic price adjustments" prior to budget (2007-2008). Companies dealing in the milk products like packaged milk as well as yogurt have made the adjustments by almost Rs 4 per litre, Rs 2 for both 500 ml and 250 ml packs and Rs 5 for the 1.5 litre pack.
The rationale behind the price adjustment has not been explained, as there has not been any speculative increase in the price of milk over the last few months sources referred to a report.
Sources said that it would be the first hearing to be convened in Lahore for obtaining necessary documents from these companies. About the new Competition Law, sources said, the federal cabinet is likely to take up the matter of Competition Policy and Law in Pakistan in its next meeting on June 27 (today).
Sources said that the MCA has been revitalised streamlining the processes and revamping the work procedures in a transparent manner. The Ministry of Law and Justice had vetted the new law seeking conversion of the MCA into a Competition Commission.
Under the new organisational design for the commission, there would be a broader scope of action to put in place healthy and competitive environment. The MCA encourages growth of industry in a non-manipulative manner. On the other hand, the working of authority has been streamlined under the chairmanship of Khalid Mirza.
Sources said that the business should grow, but the public interest should also be protected. The new proposed law would protect obligations and capacity of the businesses needed to be strengthened. It is important to mention that the Chairman MCA Khalid Mirza had also served in the World Bank and later as chairman, Securities and Exchange Commission of Pakistan (SECP).