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ISLAMABAD: As the government decides to import another 0.5 million tonnes of sugar to stabilise prices, the Competition Commission of Pakistan (CCP) has started hearings in the proceedings against the Pakistan Sugar Mills Association (PSMA) and 84 member mills for prima facie cartelisation, in violation of section 4 of the Competition Act, 2010.

The CCP will pass order, once the hearings are complete.

Under the Competition Law of Pakistan, the CCP is empowered to impose up to 75 million rupees of penalty or up to 10 percent of the annual turnover on undertakings that violate the law.

The hearings were commenced on 7th January and continued on 8th, 11th, 15th, and 20th January 2021, respectively.

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, first round of hearings are underway with counsels raising their preliminary objections before the bench of the CCP.

Owing to importance of the matter, a full bench of the CCP comprising Chairperson Rahat Kaunain Hassan and members Shaista Bano, 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 enquiry report of the CCP, the 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 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 among themselves the quantity of sugar to be supplied for two USC tenders.

Another allegation is that 15 mills in 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 the CCP will pass an order after hearing the respondents’ pleadings in the matter.

Copyright Business Recorder, 2021

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