The Competition Commission of Pakistan (CCP) has commenced hearings in the proceedings against Pakistan Sugar Mills Association (PSMA) and 84 member mills for prima facie cartelization, in violation of section 4 of the Competition Act 2010.
These hearings began on 7th January 2021 and were held on 7th, 8th, 11th, 15th, and 20th January 2021, and the CCP has so far heard PSMA and 40 sugar mills through their respective counsels.
The matter was initially fixed for hearing on 20th, 24th, and 25th November 2020. However, owing to respondents’ requests, adjournments were granted on various grounds.
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Finally, the first round of hearings is underway, with counsels raising their preliminary objections before the bench of CCP. Owing to the importance of the matter, a full bench of CCP, comprising the Chairperson, Rahat Kaunain Hassan, and Members Shaista Bano, Bushra Naz Malik, and Mujtaba Lodhi, is hearing the matter.
PSMA and its members are being provided with an opportunity of hearing to plead their cases concerning the prima facie violations indicated in their respective Show Cause Notices (SCN) issued in November 2020.
As per the inquiry report of the CCP, PSMA and 84 sugar mills have found to be in prima facie violation of the Act of 2010 by controlling domestic stocks/supplies through the determination of export quantities, creating zonal divisions in Punjab to coordinate on sales, stock positions, and production quota to monitor, and control quantity to be sold.
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It was also found that PSMA’s platform in Punjab Zone was used to share sensitive commercial stock information having a direct bearing on current and future prices of white refined sugar.
Furthermore, certain mills are alleged to have used PSMA’s platform to take a collective decision to divide the quantity of sugar amongst themselves to be supplied for 2-USC tenders.
Another allegation is that 15 mills in Punjab Zone collectively decided to cease crushing activity from 30th December 2019 to 11th January 2020.
Further hearings in the matter are scheduled in the following weeks. The bench of CCP will pass an order after hearing the respondents’ pleadings in the matter.
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