CCP investigating Ghee Manufacturers

July 9, 2021

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In order to discover alleged Cartel activities, the Competition Commission of Pakistan (CCP) conducted a search and inspection today at the offices of the Pakistan Vanaspati Producers Association (PVMA) for possible violations of sections 3 and 4 of the Competition Act 2010 in the edible oil and ghee sector.

In accordance with article 34 of the Law, inspections and searches were carried out with the aim of seizing documents and information stored on the computer about the alleged role of PVMA in anti-competitive activities. Three different groups of authorized persons came to the premises of the PVMA and looked for important information. PVMA officials cooperated fully with the research teams and provided the required inventory data and computer-signed inventory data.

During its investigation, the CCP Investigation Commission found that PVMA is an association of 125 edible butter and margarine manufacturers who, according to media reports, appear to contribute to the retail prices of various brands of edible butter and margarine. for different market segments.

The information available to the Committee of Inquiry also shows that PVMA distributes freight charges between factories/member companies and often reduces those charges as a result of high/low prices for high-speed diesel (HSD). Such negotiations at the association level seem obvious and are contrary to section 4 of the 2010 Competition Law.

PVMA’s alleged anti-competitive behavior indicates that its platform is being used to make collective business decisions regarding oil / ghee prices and cost components. Competition law prohibits such business practices.

The records maintained by the Commission of Inquiry may provide evidence/evidence of the possible role of the Association and other companies in the recent increase in the demand for cooking oil and ghee-based products.

A CCP has a legal obligation to ensure free competition in all areas of commercial and economic activity, promote economic efficiency, and protect consumers from anti-competitive practices, including the pricing of raw materials.