The Competition Commission of Pakistan (CCP) based on discovery of fresh information made available vis-à-vis prima facie collusion in the wheat flour sector carried out a search and inspection of Pakistan Flour Mills Association (PFMA) premises in Lahore.

The CCP in its recent order dated 13 December 2019 had imposed a penalty of Rs75 million on PFMA for taking decisions with respect to fixing the price of wheat flour and the quantities of production of wheat flour by its member mills. The CCP, in its order, had issued directions to the PFMA that discussions, deliberations and decisions regarding current and future pricing, production and marketing are anticompetitive and should be avoided at all costs by the associations. Despite the foregoing directions, based on the information received by the CCP, the PFMA and its members prima facie are involved in prohibited conduct under the Competition Act (Act).

Through its various enforcement orders, the CCP had issued guidelines with reference to conduct/role of associations in any sector. The association may engage in activities that increase awareness of standards and technologies and may also make effort to develop consensus amongst its members regarding public policies. However, the association should not, at any cost, indulge in any activity which may violate the Act. The rule of thumb is that the association is not allowed to discuss, deliberate or share sensitive commercial information that may allow its members who are competitors to coordinate business policy.

The CCP's inspection team has impounded important documents from PFMA premises as a result of the search and inspection carried out on Tuesday, said a spokesman of the CCP.

Meanwhile, Pakistan Flour Mills Association (PFMA) Central President Asim Raza Ahmad while talking to Business Recorder said that they had received a letter from the CCP to explain why the rates of flour bags were reduced.