United Distributors Pakistan, International Brands mull legal action against CCP penalty

Following penalties imposed by the Competition Commission of Pakistan (CCP), United Distributors Pakistan Limited (UDPL) and International Brands (Private) Limited (IBL) said they are reviewing the order and considering legal options.

UDPL, engaged in the manufacturing of pesticides and fertilizers, said in its filing to the Pakistan Stock Exchange (PSX) on Friday.

“The CCP had initiated proceedings against UDPL and IBL, with respect to a non-compete agreement that had been entered into between the parties, in respect of which the company had made disclosures under the applicable law from time to time (and last on May 15, 2024),” read the notice.

Two firms found guilty of Rs1.13bn anti-competitive pact in pharmaceutical sector

The CCP found UDPL and IBL guilty of Rs1.13 billion anti-competitive agreement. It imposed a total penalty of Rs42 million on both companies for entering into and giving effect to the non-compete agreement that the commission said had violated Section 4 of the Competition Act, 2010.

In its statement on Wednesday, the CCP said the agreement had constituted an illegal market-sharing arrangement that foreclosed competition and had been executed in clear contravention of the law.

Meanwhile, UDPL, in its statement on Friday, maintained that the companies had been transparent about this agreement and had made several disclosures — the last one on May 15, 2024.

“Although the actual implementation of the restrictive arrangement under the said agreement was (and continues to be) subject to seeking the requisite exemption from CCP, regrettably, due to certain internal delays in obtaining the necessary information, the company and IBL were unable to file the exemption application in a timely manner.

“Prior to the filing, CCP issued show-cause notices to the companies on the basis that the company had received consideration under the agreement from IBL, which the CCP became aware of pursuant to the transparent disclosures made by the company,” UDPL said.

The company shared that an exemption application was subsequently filed by the parties, which is currently pending.

UDPL maintained that it “has always been transparent in its disclosures demonstrating its intention to comply with all applicable laws”.

“Consequently, pursuant to an order dated July 2, 2025, received by the company on July 3, 2025, the CCP has, inter alia, levied a penalty of Rs21,000,000/- on the company for allegedly acting upon the restrictive arrangement and disclosing the same without seeking prior clearance/exemption from the CCР.

“The company, along with IBL, are currently reviewing the order and seeking advice regarding appropriate remedies that may be taken, as the parties are of the view that cogent grounds exist in favour of the companies and their actions,” it said.

The CCP imposed a penalty of Rs20 million each on UDPL and IBL for violating Section 4(1) and 4(2)(b) of the Act. An additional penalty of Rs1 million was levied on UDPL under Section 38 for making disclosures to PSX without regulatory clearance.