Supreme Court Upholds Penalty on Ghee, Cooking Oil Makers for Price Fixing

The Supreme Court of Pakistan has upheld the Competition Commission of Pakistan’s (CCP) finding that the Pakistan Vanaspati Manufacturers Association (PVMA) violated competition law by collectively fixing prices of ghee and cooking oil.

A two-member Supreme Court bench comprising Justice Jamal Khan Mandokhail and Justice Salahuddin Panhwar upheld the findings of both the CCP and the Competition Appellate Tribunal (CAT).

The court directed PVMA to deposit a penalty of Rs. 30 million.

The case relates to discussions held between the federal government and PVMA during 2007-09, when the government was seeking lower prices for ghee and cooking oil.

PVMA took part in the discussions and later communicated the agreed prices to its member companies.

The CCP found that the association had negotiated and fixed prices on behalf of its members with the government, violating Section 4 of the Competition Act, 2010. It initially imposed a Rs. 50 million penalty, which was later upheld by the CAT.

The Supreme Court agreed that competing businesses must independently determine their prices based on their own commercial decisions. A trade association cannot collectively set prices for its members.

The court also rejected the argument that lower agreed prices made the arrangement acceptable.

It held that the key violation was not whether the agreed prices were higher or lower, but that competing businesses had collectively determined prices instead of making independent pricing decisions.

The court further said that an arrangement cannot escape competition law simply because it is intended to serve the public interest.

The Supreme Court therefore upheld the CCP’s finding of price-fixing and ordered PVMA to deposit Rs. 30 million.

The post Supreme Court Upholds Penalty on Ghee, Cooking Oil Makers for Price Fixing appeared first on ProPakistani.