ISLAMABAD-As part of an ongoing enquiry into the possible anti-competitive activities in the sugar industry, the Competition Commission of Pakistan (CCP) on Monday has carried out a search and inspection of the Pakistan Sugar Mills Association (PSMA) Lahore and Islamabad offices.

The CCP authorised its officers to the ‘Enter and Search’ PSMA premises under Section 34 of the Competition Act, 2010 following indications of PSMA’s anti-competitive activities including, but not limited to, the collective stoppage of crushing in season 2019-20, collective rise in prices of sugar, and collective refusal to supply sugar to Utility Store Corporation (USC) as recently reported.

Two different teams, authorised by the Commission, simultaneously carried out the search in PSMA’s Islamabad and Lahore premises and impounded the relevant record.

Through its various enforcement orders, the CCP warned industry associations from indulging in activities, which may violate the Competition Act. The rule of thumb is that the associations are not allowed to discuss, deliberate or share sensitive commercial information that may allow its members, who are competitors, to co-ordinate business policy or discussion on economic aspects. The CCP, as part of its statutory mandate under the Competition Act, strives to eradicate anti-competitive practices in all sector of economy.

It is worth mentioning here that sugar inquiry commission report was made public in May this year which named key political figures, mostly from government, for their alleged involvement in sugar scandal. They included the ruling Pakistan Tehreek-i-Insaf (PTI) leader Jahangir Tareen, the leader of Pakistan Muslim League-Q (PML-Q), Monis Elahi, a brother of sitting federal minister Khusro Bakhtiar, and sons of Pakistan Muslim League-Nawaz (PML-N) leader Shahbaz Sharif.

In July this year, according to the reports, the federal government had directed the relevant departments including CCP to launch formal investigations and where necessary take “penal, corrective and mitigating measures” against the “sugar cartel” implicated in the sugar commission’s report. Adviser to the Prime Minister on Accountability and Interior Shahzad Akbar had reportedly written letters to Competition Commission of Pakistan (CCP), Sindh chief secretary, Punjab chief secretary, State Bank of Pakistan (SBP), Federal Investigation Agency (FIA), Securities and Exchange Commission of Pakistan (SECP) and Federal Board of Revenue (FBR) to “undertake a comprehensive investigation” into the matter.

In his letter to the CCP, Akbar highlighted that the sugar commission had conducted a forensic inquiry of nine mills and had found evidence of “cartelisation and anti-competitive practises” by mill owners as well as brokers “which led to hoarding” of stocks. Furthermore, the letter said, the mill owners “orchestrated ex-mill and retail price manipulation through satta, abuse of dominant position by the sugar cartel and non-provision of sugar to the utility stores corporation”. 

Akbar directed the CCP to carry out an investigation to “determine the reasons, magnitude and inordinate delay in taking action against the sugar cartel despite earlier internal findings regarding cartelisation” and where mandated take “penal, corrective and mitigating measures”.