LAHORE: The Competition Commission of Pakistan (CCP) on Tuesday raided the offices of the Pakistan Flour Mills Association (PFMA) here and seized some record on the suspicion of ‘anti-competition’ activities pertaining to fixing price and production quantity of wheat flour.

The CCP says the raid was conducted on the basis of information which revealed “prima facie collusion in the wheat flour sector”.

A seven-member CCP team led by Director General Ikramul Haq with officers from legal and cartels wings searched and inspected the PFMA Lahore offices on reports that the flour millers’ body is violating its earlier orders, which prohibited making decisions on price and supply of flour in a way that discourages competition.

The CCP had in its orders dated Dec 13, 2019, imposed a penalty of Rs75 million on the PFMA for taking decisions with respect to fixing the price of wheat flour and quantities of production [of wheat flour] by its members.

Three sugar stockists taken into custody in another move

It had also told the flour millers that discussions, deliberations and decisions regarding current and future pricing, production and marketing are anti-competitive and should be avoided at all costs by the associations.

A press release of the CCP says that despite the foregoing directions, it received the information that PFMA and its members are prima facie involved in prohibited conduct under the Competition Act.

It says through its various enforcement orders, the CCP had issued guidelines with reference to conduct/role of associations in any sector. An association may engage in activities that increase awareness of standards and technologies and may also make efforts to develop consensus amongst its members regarding public policies, it adds.

However, the association should not, at any cost, indulge in any activity which may violate the Competition Act.

“The rule of thumb is that the association is not allowed to discuss, deliberate or share sensitive commercial information that may allow its members, who are competitors to co-ordinate business policy.”

The inspection team has impounded important documents from PFMA premises as a result of the search and inspection carried out on Tuesday.

PFMA central chairman Asim Raza Ahmed says the CCP action has flabbergasted them as the plea presented by the anti-cartelisation watchdog team is that the millers had got published an advertisement wherein the people were informed about the Rs3 per 20kg bag price cut in wheat flour taken after a meeting with the provincial authorities.

He claims that the release issued by the CCP didn’t match the courtesy its inspection team had shown for scanning PFMA record.

An office-bearer of the Nanbai Association, who requested not to be named, alleges that the PFMA cut wheat flour price by Rs3 per 20kg bag but increased the price of per 50kg bag of fine by Rs1,200.

Meanwhile, a special task force has launched a crackdown on alleged hoarders of sugar and those selling the sweetener at higher rates.

So far three dealers have been taken into custody from various parts of the Punjab capital and sent to jail for 30 days. Their sugar stocks have also been seized.

The step has immediately brought down sugar prices by Rs400 per 50kg bag, from Rs4,000 to Rs3,600, in the wholesale market though its retail rate yet prevails at Rs80 per kg.

Published in Dawn, February 12th, 2020