By Staff Reporter
ISLAMABAD: The antitrust regulator has issued show-cause notices to 10 sugar mills in Punjab province for allegedly colluding to delay the start of the crushing season and fix sugarcane procurement prices at Rs400 per maund, in a move that could disrupt sugar supplies and inflate retail costs.
The Competition Commission of Pakistan said its review uncovered a meeting on Nov. 10 hosted by Fatima Sugar Mills where representatives agreed to begin crushing on Nov. 28, two weeks later than the official Nov. 15 date set by the Punjab Sugarcane Commissioner. The mills also jointly set the cane purchase price at Rs400 per maund, amounting to collusive decision-making, according to the regulator.
A show-cause notice requires the recipients to explain their actions or face potential legal proceedings for violating rules or laws. The session was chaired by Rana Jameel Ahmad Shahid, resident director of Fatima Sugar Mills, and included in-person attendees from Sheikhoo Sugar Mills, Thal Industries Corp., Tandlianwala Sugar Mills’ Rehman Hajra unit, JK-1 Sugar Mills, Ashraf Sugar Mills and Kashmir Sugar Mills. Representatives from Siraj Sugar Mills, Two Star Sugar Mills and Haq Bahoo Sugar Mills participated online.
Such agreements violate Section 4 of the Competition Act, 2010, which prohibits market players from fixing prices or coordinating business decisions. The collusion highlights a stark power imbalance between sugar mill owners and farmers, the CCP said. Cane prices should emerge from individual negotiations between each mill and growers, driven by supply and demand dynamics. Instead, the mills unilaterally imposed a uniform rate of Rs400 per 40 kilograms, sidelining market forces.
The regulator has ordered all 10 mills to file written responses within 14 days, justifying why it shouldn’t launch proceedings against them for prohibited pacts, manipulating the sugarcane market and securing unfair gains via the delayed crushing. Postponing the season’s start risks creating sugar shortages and pushing up consumer prices.
CCP Chairman Kabir Ahmed Sidhu issued a stern warning to business groups and industry associations: “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 penalise.”
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