CCP Issues Notices to 84 Sugar Mills Over Cartelization

The Competition Commission of Pakistan (CCP) has issued show-cause notices to Pakistan Sugar Mills Association (PSMA) and its 84 member mills on multiple instances of prima facie cartelization in violation of Section 4 of the Competition Act, 2010.

The show-cause notices have been issued after the CCP decided to initiate proceedings under Section 30 of the Act on the recommendations of an enquiry into the anti-competitive activities in the sugar sector. The CCP’s enquiry has found multiple instances where the Pakistan Sugar Mills Association (PSMA) is acting as a front-runner for cartelization in the sugar industry.

Evidence gathered during search and inspections conducted on the premises of PSMA and JDW Sugar Mills seems to suggest these anti-competitive activities have continued since 2010.

The impounded data included the exchange of emails between a senior official of one of the Sugar Mill (Member of PSMA) and PSMA Punjab zone office bearers regarding sensitive commercial information such as mill-wise, district-wise sugar stock position, and even the quantity of cane crushed, sugar produced, recovery percentage, carry forward old/raw sugar, total sugar, quantity sold, balance and sold percentage.

Moreover, an analysis of the WhatsApp messages exchanged in a group of PSMA officials, the same senior official of that Sugar Mill was found to be in constant communication with regard to price and stock-related data of sugar mills.

The impounded data indicated the senior official’s continued involvement in sharing/receiving sensitive information regarding sugar industry since 2012 when he was nominated as the focal person for coordinating the sugar stock position by PSMA.

Furthermore, the PSMA’s platform was also being used by member sugar mills to collectively make commercially sensitive decisions such as reduction in domestic stocks/supplies of sugar, which led to an increase in or maintenance of desired price levels in the relevant market.

PSMA and its members have been provided with an opportunity of hearing to plead their case with reference to the prima facie specific violations indicated therein. PSMA and all 84 sugar mills prima facie violated the Act by collectively deciding to export sugar and thereby fixing the quantities of sugar to be supplied in Pakistan. Similarly, they also violated the Act by reducing stocks of sugar through exports; hence collectively raised and maintained prices of sugar in Pakistan.

Moreover, in the crushing season 2019-20, 15 sugar mills in Punjab under the auspices of PSMA, collectively decided to delay crushing of sugarcane leading to a reduction in quantity supplied in the market. In Punjab, 45 sugar mills used PSMA’s platform to share business-sensitive information with each other.

Lastly, PSMA and sugar mills divided quantities of sugar in tenders issued by USC on various occasions. The CCP found 19 mills in Punjab to have violated the Act with reference to a tender dated 2019 whereas, 30 mills from all over Pakistan have been issued show cause for an earlier tender.

The findings of CCP’s previous sugar enquiry report in 2009 had found that PSMA and its members had engaged in fixing of prices and collusion in the purchase of sugarcane, production of sugar, and sale or trade of sugar. In the instant matter, it appears that PSMA and its member mills sought to keep prices stable, inter alia, by controlling the supply of sugar available in the domestic market.

M/s. Pakistan Sugar Mills Association was found in cartelization in the sugar industry and was issued a notice by the CCP.

List of sugar mills to whom notices were issued by the CCP are

PUNJAB

• M/s. Abdullah Sugar Mills Ltd
• M/s. Al-Arabia Sugar Mills Ltd
• M/s. Adam Sugar Mills Ltd
• M/s. Ashraf Sugar Mills Ltd
• M/s. Baba Farid Sugar Mills Ltd
• M/s. Brothers Sugar Mills Ltd
• M/s. Chanar Sugar Mills Ltd
• M/s. Chaudhry Sugar Mills Ltd
• M/s. SW Sugar Mills Ltd (Chishtia)
• M/s. Etihad Sugar Mills Ltd
• M/s. Fatima Sugar Mills Ltd
• M/s. Fecto Sugar Mills Ltd
• M/s. Haq Bahu Sugar Mills Ltd
• M/s. Haseeb Waqas Sugar Mills Ltd
• M/s. Hunza I Sugar Mills Ltd
• M/s. Hunza II Sugar Mills Ltd
• M/s. Huda Sugar Mills Ltd
• M/s. Hamza Sugar Mills Ltd
• M/s. Rasool Nawaz Sugar Mills Ltd
• M/s. Husein Sugar Mills Ltd
• M/s. Indus Sugar Mills Ltd
• M/s. Ittefaq Sugar Mills Ltd
• M/s. JDW-I Sugar Mills Ltd
• M/s. JDW-II Sugar Mills Ltd
• M/s. Kashmir Sugar Mills Ltd
• M/s. Kamalia Sugar Mills Ltd
• M/s. Layyah Sugar Mills Ltd
• M/s. Safina Sugar Mills Ltd
• M/s. Macca Sugar Mills (Pvt.) Limited
• M/s. Madina Sugar Mills Ltd
• M/s. Noon Sugar Mills Ltd
• M/s. Pattoki Sugar Mills Ltd
• M/s. Ramzan Sugar Mills Ltd
• M/s. Shahtaj Sugar Mills Ltd
• M/s. Shakarganj I Sugar Mills Ltd
• M/s. Shakarganj II Sugar Mills Ltd
• M/s. Sheikhoo Sugar Mills Ltd
• M/s. Tandlianwala I Sugar Mills Ltd
• M/s. Tandlianwala II Sugar Mills Ltd
• M/s. Popular Sugar Mills Ltd
• M/s. RYK Sugar Mills Ltd
• M/s. Jahuarabad Sugar Mills Ltd (Kohinoor)
• M/s. JK Sugar Mills Ltd
• M/s. Almoiz II Sugar Mills Ltd
• M/s. Imperial Sugar Mills Ltd

SINDH

• M/s. Abdullah Shah Ghazi Sugar Mills Ltd
• M/s. Al-Abbas Sugar Mills Ltd
• M/s. Al-Noor Sugar Mills Ltd
• M/s. Ansari Sugar Mills Ltd
• M/s. Army Welfare Sugar Mills Ltd
• M/s. Bawany Sugar Mills Ltd
• M/s. Dewan Sugar Mills Ltd
• M/s. Deharki Sugar Mills Ltd
• M/s. Digri Sugar Mills Ltd
• M/s. Faran Sugar Mills Ltd
• M/s. JDW-III Sugar Mills Ltd
• M/s. Habib Sugar Mills Ltd
• M/s. Khairpur Sugar Mills Ltd
• M/s. Khoski Sugar Mills Ltd
• M/s. Kiran Sugar Mills Ltd
• M/s. Larr Sugar Mills Ltd
• M/s. Mataria Sugar Mills Ltd
• M/s. Mehran Sugar Mills Ltd
• M/s. Mirpurkhas Sugar Mills Ltd
• M/s. Mirza Sugar Mills Ltd
• M/s. Najma Sugar Mills Ltd
• M/s. Naudero Sugar Mills Ltd
• M/s. New Dadu Sugar Mills Ltd
• M/s. Pangrio Sugar Mills Ltd
• M/s. Ranipur Sugar Mills Ltd
• M/s. Sakrand Sugar Mills Ltd
• M/s. Sanghar Sugar Mills Ltd
• M/s. Seri Sugar Mills Ltd
• M/s. Shahmurad Sugar Mills Ltd
• M/s. Sindh Abadgars Sugar Mills Ltd
• M/s. SGM Sugar Mills Ltd
• M/s. Tharparkar Sugar Mills Ltd
• M/s. TMK Sugar Mills Ltd

KPK

• M/s. Chashma I Sugar Mills Ltd
• M/s. Chashma II Sugar Mills Ltd
• M/s. Al-Moiz Industries (Unit-I)
• M/s. Premier Sugar Mills Ltd
• M/s. Khazana Sugar Mills Ltd
• M/s. Tandlianwala Sugar Mills Ltd (Zamand)

The post CCP Issues Notices to 84 Sugar Mills Over Cartelization appeared first on .

from Business https://ift.tt/36mWl7B