Show cause notices to fertiliser makers: CCP adjourns hearing till December 21

The Competition Commission of Pakistan (CCP) on Thursday conducted hearing in the matter of show cause notices issued to fertiliser manufacturers for alleged contravention of the Competition Ordinance and adjourned the hearing till 21 December 2009 for further arguments.
The hearing in the matter was conducted by a two-member Bench of CCP, comprising Khalid A Mirza, Chairman and Ms Rahat Kaunain Hassan, Member (Legal). The representatives of Dawood Hercules Chemical Ltd, and Engro Chemicals Pakistan Ltd, Fauji Fertiliser Company appeared before the Commission and addressed the concerns raised by an enquiry conducted by the Commission regarding anti competitive behaviour in the fertiliser sector in Pakistan.
The enquiry had concluded that the major fertiliser producers were abusing their dominant positions by tying the sale of Urea with DAP, and making the conclusion of contracts subject to the acceptance of other supplementary obligation, which were unrelated to the subject of the contract. It was also asserted by inquiry report that fertiliser manufacturers were subjecting fertiliser dealers to unilateral changes in price during the booking and delivery time.
The parties stated that the fertiliser sector had been going through a period where there was a severe shortage of supply of fertiliser in Pakistan. As a result of this crisis, the prices of fertilisers had seen significant fluctuations and that any change in price was because of changing demand and supply rather than any manipulation on the part of the fertiliser companies. The parties also placed significant data before the Bench in support of their contention.
The parties sought the guidance of the Commission and expressed keenness to change or improve their trade practices if so required by the Commission. The CEO of Engro, Asad Umar, said that Engro had initiated a programme of competition awareness and education within the company and had put internal controls in place to avoid violations of competition principles.
The Bench heard all three parties and sought some additional data and documentation from them. The Bench commended the parties for being forthcoming and having a positive approach. Since FFC could not complete its submissions, the hearing was adjourned till 21 December 2009 for further arguments.-PR