ISLAMABAD              -           The Competition Commission of Pakistan (CCP) has imposed fine worth Rs75 million on Pakistan Flour Mills Association (PFMA) for fixing the price and quantity of wheat flour in violation of Section 4 of the Act. Three members bench of CCP, headed by its chairperson Vadiyya Khalil, decided to impose the maximum fixed penalty on PFMA to the tune of Rs75 million. The CCP has directed PFMA to deposit the fine amount with Registrar of the Commission within 60 days from the date of receipt of this Order. The CCP’s bench comprises of Dr Shahzad Ansar and Dr Muhammad Saleem as its members.

The CCP had taken took notice of the news items published in a newspaper, suggesting an unusual price hike in the prices of ‘wheat flour’ or ‘wheat atta’ across Pakistan. After an initial probe, the Commission, in pursuance of Section 34 of the Act, authorized an inspection of the premises of PFMA. The search and inspection raid on the premises of PFMA was carried out on 4 October 2016 and documents were impounded from the premises of PFMA.

In addition to the search and inspection raid, the Commission had also carried out research on the wheat flour milling industry. A meeting was also held with the representatives of PFMA on 13 December 2016. PFMA submitted further documents and notifications of Punjab Food Department. In order to analyze the documents and examine the actual/possible/suspected/alleged violations of the Act by the PFMA, the Commission constituted an enquiry. The documents and materials impounded at PFMA premises and those subsequently submitted by PFMA were examined by the enquiry committee. The enquiry was concluded vide Enquiry Report dated 01 August 2017.

The enquiry in the matter concluded that PFMA is providing a platform to its members for settling of prices of wheat flour to avoid any form of competition which is in violation of Section 4 of the Act. In its Order, CCP observed that under Article 38 of the Constitution the State is responsible to ensure the provisions of food and basic necessities at fair prices along with other social and economic benefits to its citizens. Accordingly, Provincial Food Departments set a maximum cap of the Wheat Flour Price under the Foodstuffs (Control) Act, 1958; as wheat is Pakistan's dietary staple and used by consumers belonging to all socio-economic groups. Wheat flour currently contributes 72 percent of Pakistan's daily caloric intake with per capita wheat consumption of around 124 kg per year, one of the highest in the world.