The Competition Commission of Pakistan (CCP) has been tasked to check the milk and meat sectors against possible cartelisation and take corrective measures to control the undeclared monopoly and mitigate any expected rise in prices of pulses. Sources told Business Recorder here on Friday that the issue of cartelisation in milk and meat products came to light during the last meeting of National Price Monitoring Committee (NPMC) meeting held in Finance Division under the chairmanship of Finance Minister Ishaq Dar.
Sources stated that the meat and milk sectors are already under observation of CCP. In August last year, the CCP released a study on the meat sector in Pakistan, covering issues such as price monitoring and quality of meat and also exploring the growth potential of the sector.
The study was conducted as part of the assessments the CCP undertakes to understand competition issues in sectors that have implications for consumers. The CCP in its report identified ineffective price and quality monitoring at the district level that result in high price and low quality of meat that affects both urban and rural consumers. Smuggling of animals to neighbouring Afghanistan is also an issue that affects availability at affordable price to domestic consumers. Similarly in April last year, the CCP had issued show cause notices to food companies/milk manufacturers for alleged violation of Section 10 of the Competition Act, 2010 by advertising tea whiteners as milk.
The CCP''s investigation found that some dairy companies were, prima facie, engaging in deceptive marketing practices in violation of Section 10 (1) of the Act. They are prima facie, distributing false and misleading information that is capable of harming the business interests of other undertakings in terms of Section 10 (2) (a) and are also distributing information to consumers that lacks reasonable basis about the character, properties and quality of their product in terms of Section 10 (2) (b) of the Act. 125. Whereas, a food company in advertising their product was also prima facie involved in the false and misleading comparison of products in terms of Section 10 (2) (c) of the Act 126. Deceptive marketing practices have a direct impact on the public at large. The undertakings should disclose correct information regarding their product to the consumers. False and misleading advertisements induce the consumers to purchase the product and hence it gives the undertaking a competitive edge over other competing undertakings. Hence, it is in the interest of the public that the undertakings should be stopped from advertising their products in a deceptive manner and be encouraged to resort to advertising practices that are transparent and give consumers/customers true and correct information about the products, rather than making misleading and false claims.
During the last meeting of NPMC, the minister noted the increasing trend in prices of eggs, garlic, milk powder (NIDO), beef, mutton and gram pulse, and directed the Ministry of National Food Security and Research and Competition Commission of Pakistan to closely monitor the situation, control the undeclared monopoly, take corrective measures and arrest any cartelisation, particularly in milk and meat products as well as mitigate any expected rise in prices of pulses. For gram pulse, he directed the Ministry of National Food Security and Research and USC to carry out inter-ministerial consultations with all stakeholders in order to address any abnormal spike in prices.
The meeting was attended by the representatives from the provinces of Punjab, Sindh, Khyber Pakhtunkhwa, Islamabad Capital Territory, Ministries of Industries, Law and Justice, Commerce, National Food Security and Research, Cabinet, and Planning Development and Reforms, Statistics Division, Competition Commission of Pakistan, Pakistan Bureau of Statistics, Utility Stores Corporation and Federal Board of Revenue.
The NPMC meeting was informed that the headline inflation measured by CPI increased by 3.7 per cent in December 2016 compared to 3.8 per cent of previous month and 3.2 per cent of December last year. On average during July-December FY 2017 it is recorded at 3.88% as compared to 2.08% in corresponding period of the last year.
On monthly basis the CPI and food inflation remained lowest by -0.7% and -1.9% since February 2015. The CPI is tamed down and is in control. The other inflationary indicators have also been contained. The meeting noted continuous decline of SPI since last week of November 2016. It recorded continuous six weekly decline which has brought food inflation to 3.0 per cent in December 2016 compared to 3.3 per cent of previous month while non food inflation remained at same level of previous month at 4.2 per cent, whereas core inflation increased by 5.2 per cent compared to 5.3 per cent of previous months and SPI and WPI in December 2016 recorded at 0.5 per cent and 3.1 per cent respectively, compared to 0.6 per cent and 2.6 per cent of previous month.