Competition Commission of Pakistan (CCP) has, reportedly, found some evidence indicating that a few ghee/cooking oil manufacturers are involved in profiteering, well-informed sources told Business Recorder. Fixing price and production capacity distorts competition and is in violation of section 4 of the Competition Act, 2010.
The sources said prices of three brands namely Dalda, Sufi and Habib are about Rs 20-25 per kg higher than other brands. The Commission is mandated by the Competition Act 2010 to investigate all suspected collusive activities which may have a negative impact on competition in the economy. CCP teams recently conducted raids at the offices of Pakistan Vanaspati Manufacturers Association (PVMA) in Islamabad and Karachi and took away dozens of files. Official documents available with Business Recorder reveal that prima facie there may be collusive activity with regard to pricing and production of ghee and cooking oil.
A number of ghee/cooking oil manufacturers, especially in Karachi, are also manufacturing substandard products besides using chemicals meant for soap manufacturing. The Ministry of Industries had launched a campaign against ghee units involved in manufacturing substandard products but shelved it due to unexplained reasons.
The MoI&P, sources said, will again request the provincial government to launch crackdown on ghee/cooking oil manufactures which are involved in substandard Ghee manufacturing and playing with the lives of the innocent people.
A couple of days ago when Chairperson CCP, Rahat Kaunain Hasan was asked about the evidence collected during inspection of offices of association, she replied that CCP had collected information during inspections of the offices of the PVMA, which is presently being examined by enquiry officers. The CCP has found prima-facie evidence related to competition from the documents impounded during inspection of these offices.
The sources said, four officials of CCP have been authorised to collect all the relevant information for the purposes of enforcing section 4 of the Act and exercise any or all powers provided under section 34 of the Act and detecting thereof, on part of PVMA and its members of any anti-competitive decision or collusive behaviour including the following: (a) to impound originals and / or make extracts or copies of any agreement made and /or correspondence exchanged between the PVMA and its members including but not limited to fixing the price of production or any other restrictive trading conditions agreed to with regard to the provision of goods or indicating directly or indirectly a violation under section 4 of the Act. According to the documents, almost all ghee and cooking oil manufacturers are producing below capacity at an average of around 40 per cent of total capacity. Moreover, while manufacturing units immediately raise domestic prices in line with international prices, they do not lower prices when international edible oil prices fall.
The Ministry of Industries and Production has also similar complaints against the palm oil importers and this issue has been discussed in the ECC on a number of occasions.