The show-cause notices, issued by the Competition Commission of Pakistan (CCP) to 66 mills, are said to be based on the records retrieved during the inspection of Pakistan Sugar Mills Association (PSMA) offices located in Karachi, Lahore and Islamabad.
Sources told Business Recorder here on Monday that the CCP inquiry based on retrieved records had no record of other mills except for those 66 members of the PSMA. Globally, associations have been involved in cartelisation and price fixation.
The competition agencies across the world have been engaged in checking the collusive behaviour, anti-competitive practices and cartelisation within the associations. These kind of anti-competitive activities are committed by companies operating under the umbrella of association.
Whenever an association has been formed, there are chances of cartelisation across the world. In many countries, business firms had collaborated by forming cartels to fix market prices to secure higher profits. The individual mills, which are not part of any association, cannot form a cartel on their own. The inspection and search of the PSMA offices has helped in collecting data of only member mills.
The association appears to be the front for cartelisation and price fixation. If association had any record of any other non-members involved in cartelisation, it could provide the same to the commission, sources added. Earlier, the CCP directed the sugar mills to respond to show-cause notices within 14 days of the issuance of notice and submit necessary facts and materials before the commission. The first hearing of these cases would be held on January 21.
The commission would provide full opportunity to the sugar mills to submit documentary evidence to prove that they are not involved in cartelisation. If no replies to the show-cause notices are received within the stipulated period or the member undertaking of the PSMA fail to appear before the commission for the hearing on the said date, the commission may proceed in the matter as provided under the law.