Rs 44 billion fine imposed on sugar industry – Journal

ISLAMABAD: The Pakistan Competition Commission (CCP) on Friday imposed the highest ever sanction on the sugar industry of 44 billion rupees for cartelization, pricing and market manipulation.

The sanction was imposed on the calculation of the turnover of 55 sugar factories for the fiscal year 2019, with a maximum sanction of 300 million rupees having been imposed on the Pakistan Sugar Mills Association (PSMA). A penalty of Rs75m was imposed for each of the four violations committed by the association, totaling Rs300m.

The CCP ordered the PSMA and the sugar factories to end the violations highlighted in the order and to file the penalty within 60 days.

Meanwhile, a PSMA press release said the CCP’s decision was not a final order as two members did not buy into the president’s point of view and voted in favor of the sweets and the PSMA. .

“The chairman of the CPC does not have the power to cast a second vote in the proceedings under the Competition Law,” the press release added.

PSMA, factories have effectively distorted competition in the market

At the same time, the CCP order states that the sugar factories collectively decided on the amount of exports, ultimately controlling the domestic supply of sugar in the relevant market during the period 2012-2020.

The CCP said the government could not afford to cross-check this information due to capacity constraints.

The ordinance states that it was observed that there was no independent, timely and accurate information gathering framework to provide quantitative support to government price control mechanisms for commodities.

“As a result, policymaking is based on questionable sources of information,” the CCP said. “Instead, political decisions that affect the lives of all citizens are made largely on the basis of questionable comments received directly from industry associations or groups of relevant suppliers, wholesalers or retailers,” the ordinance added. .

A fixed fine of Rs50 million was imposed on each of the 22 sugar factories for having participated in a collusive manner in the call for tenders launched by the Utility Stores Corporation (USC) in 2010. The divided order was adopted by the all four members of the PCB, including its chairman Rahat. Kaunain Hassan and members Mujtaba Ahmad Lodhi, Shaista Bano and Bushra Naz Malik.

However, Ms. Bano and Ms. Malik recorded a note of dissent on the order and after the deadlock situation, Ms. Kaunain decided to approve the order. It is also the first time that the commission has taken a split decision.

Previously, the CCP approved an interim order against the sugar industry in 2010, but the proceedings were halted as the case was still before the Sindh High Court.

Posted in Dawn, le 14 August 2021

Rachel J. Bradford