CCP targets sugar cartel: 10 Punjab mills hit with show cause notices

ISLAMABAD: The Competition Commission of Pakistan (CCP) has issued show cause notices to 10 sugar mills in Punjab for colluding in relation to start of crushing season and fixing the sugarcane procurement price at Rs. 400 per maund.

The CCP’s review found that representatives of these mills held a meeting on November 10, 2025, hosted by Fatima Sugar Mills, where they collectively decided to commence crushing on November 28, instead of the Punjab Sugarcane Commissioner’s officially notified date of November 15. The mills also jointly agreed to fix the cane purchase price at Rs. 400 per maund, an act that constitutes collusive decision-making.

A show cause notice is a formal document from an authority asking a person or organization to explain their actions that appear to be a violation of rules, policies, or laws

The meeting was chaired by Rana Jameel Ahmad Shahid, Resident Director of Fatima Sugar Mills. It was attended by representatives of Sheikhoo Sugar Mills, Thal Industries Corporation, Tandlianwala Sugar Mills (Rehman Hajra Unit), JK-1 Sugar Mills, Ashraf Sugar Mills, and Kashmir Sugar Mills, while Siraj Sugar Mills, Two Star Sugar Mills, and Haq Bahoo Sugar Mills joined online.

Under Section 4 of the Competition Act, 2010, any agreement or arrangement between market players to fix prices or coordinate on business decisions is strictly prohibited and constitutes a violation of competition law.

Sugar cartel: CCP issues show-cause notices to 10 Punjab sugar mills over price fixing

There is a significant imbalance in negotiation power between sugar mill owners and farmers. Ideally, the sugarcane price should be determined through individual negotiations between each mill and farmers, based on the natural interplay of demand and supply. However, instead of allowing market forces to operate, all mill owners collectively and unilaterally fixed the price at PKR 400 per 40 kg.

Taking cognizance of this collusion, the CCP has directed all ten mills to submit a written response within 14 days, explaining why legal proceedings should not be initiated against them for entering into prohibited agreements, influencing the sugarcane market, and gaining undue commercial advantage through a coordinated delay in crushing.

Such delay crushing at the start of the season can disrupt the supply of sugar in the market, potentially leading to artificial shortages and a rise in retail sugar prices.

CCP Chairman Dr. Kabir Ahmed Sidhu, has issued a strict warning to all business associations and industry groups, stating, “No association or group of competitors will be allowed to form cartels or make collective commercial decisions that harm consumers and distort markets. CCP will take firm action against any entity found engaging in such anti-competitive behaviour and penalize.”

Copyright Business Recorder, 2025