Sugar cartelisation case hearing rescheduled on mills’ request

The Competition Commission of Pakistan (CCP) has rescheduled the rehearing of the cartelisation case against the Pakistan Sugar Mills Association (PSMA) and its member mills, following requests from their legal counsels.

The hearings, initially fixed for August 4-7, will now take place from September 22-25, 2025.

Over 70 sugar mills requested postponement of hearing, the CCP said in a press release. The adjournment was sought on grounds that over 50 mills have filed appeals against the Competition Appellate Tribunal (CAT) order in the Supreme Court, while others cited unavailability of legal representatives due to the Supreme Court’s summer recess.

While the CCP had scheduled day-to-day hearings in line with the directions of the CAT, it has allowed a one-time postponement in the interest of fairness and to ensure due opportunity for all parties to present their case.

The commission will not entertain further delays, and in case of non-appearance or repeated adjournment requests, ex-parte proceedings may be initiated.

Notices issued to sugar mills for rehearing in cartelisation case

The proceedings pertain to show cause notices issued in November 2020 to PSMA and its member mills for alleged cartelisation and anti-competitive conduct. Hearing notices were most recently issued on July 9 in compliance with CAT’s May 21 order, which directed the commission to rehear the matter before a member or chairperson not part of the original bench.

Rs44bn penalty on sugar mills: CAT remands case to CCP for rehearing

It may be recalled that in 2021, the CCP had imposed a penalty of Rs44 billion on PSMA and its member mills for cartelisation. The order was later set aside by the tribunal, which held that the casting vote exercised by the then chairperson in a 2-2 deadlock was not permissible under the Competition Act, 2010 in quasi-judicial proceedings.

CCP ‘unearths’ sugar cartel

CCP “unearthed” a cartel in the sugar industry through an extensive enquiry in October 2020, which concluded that the Pakistan Sugar Mills Association (PSMA) has been acting as a front runner for cartelisation in the sugar industry since 2010.

The CCP’s enquiry report concluded, while determining the causes behind the sugar shortage/crisis and price hike, that the sugar mills were using the PSMA platform to take a collective decision to use exports as a means of sustaining or controlling prices or “keeping it stable”.

The enquiry has concluded that the hike in sugar prices appears to be the direct result of misreporting in sugar stock positions (of which PSMA was aware of) that led to a decision to delay sugar imports.

The enquiry report observed that the decision not to import in a timely manner caused a rise in sugar prices between, July to September 2020 by Rs11.6 per kg.

Report accuses sugar millers of acting like cartel

The CCP has the evidence that indicates that in 2019 only, the domestic price of sugar hiked by Rs18/kg due to the commodity’s export, while the sugar barons made an additional gain of Rs40 billion in revenue in addition to payment of Rs29.22 billion as subsidy to them.

The enquiry report said that evidence gathered during raids on the premises of the PSMA and the JDW Sugar Mills seems to suggest these anti-competitive activities have continued since 2010.