As part of an investigation of the alleged violations of Sections 3 and 4 of the Competition Act, 2010 in the edible oil and ghee sector, the Competition Commission of Pakistan (CCP) inspected the offices of the Pakistan Vanaspati Manufacturers Association (PVMA) in Islamabad, Lahore, and Karachi today.
The inspections were carried out under Section 34 of the Act to impound documents and computer-stored information related to the PVMA’s suspected role in anti-competitive activities.
Three teams of authorized officers entered and searched the premises of the PVMA and seized important evidence. The PVMA officials cooperated fully with the search teams and handed over the required documents and computer-stored information after signing the inventory details.
During the investigation, the CCP’s inquiry committee noted that the PVMA is an association of 125 edible oil and ghee manufacturers, and as per media reports, seems to be involved in the collective price-fixing of the retail prices of various brands of cooking oil and ghee for various market segments.
The data with the committee also indicated that PVMA circulates freight charges among its member mills/companies and frequently revises these charges based on the increase/decrease in the prices of the High-Speed Diesel (HSD). Such deliberations at the level of the PVMA appear to be a prima facie contravention of Section 4 of the Competition Act, 2010.
It appears from the PVMA’s alleged anti-competitive behavior that its platform is being used to make collective business decisions with respect to the prices of oil/ghee and its cost components. However, the Competition Act prohibits such business practices.
The impounded record with the inquiry committee may prove the PVMA’s alleged role and other undertakings in the recent hike in the prices of edible oil and ghee.
The CCP is mandated to ensure free competition in all spheres of commercial and economic activities to enhance economic efficiency, and to protect consumers from anti-competitive behavior, including the price-fixing of essential commodities.