CCP slaps Rs100m fine on poultry association
Finds it flouting Competition Act 2010, PPA says it does not have funds to pay penalty
PHOTO: AFP
ISLAMABAD:
The anti-trust watchdog has slapped a fine of Rs100 million on the Pakistan Poultry Association (PPA) for illegally fixing the prices of eggs and chicken meat.
The penalty comes amid challenges to the Competition Commission of Pakistan’s (CCP) authority as the violator seems to be exploiting weaknesses of the legal system to avoid payments.
It was for the second time in the last five and a half years when the CCP found the poultry association flouting the Competition Act of 2010. It had also imposed Rs50 million fine on PPA in August 2010. However, the association went to Lahore High Court and got a stay order.
The CCP on Wednesday issued its second order against the PPA, imposing a fine of Rs100 million for price fixing of poultry products in violation of Section 4 of the Competition Act, 2010.
A bench comprising commission chairperson Vadiyya Khalil, member office of fair trade and advocacy Dr Shahzad Ansar and member cartels and trade abuses and legal Ikram Ul Haque Qureshi, has passed the order.
Evidence against PPA
The ruling disposes of the proceedings arising out of the show-cause notice issued to PPA after CCP took notice of a series of advertisements published in various daily newspapers by PPA regarding prices of live broiler chicken, meat and chicken eggs from October 6 to October 12, 2015.
The order finds that by notifying the prices of poultry products under the banner of the association, the PPA has taken an anti-competitive decision in violation of the competition act. It further states that PPA’s actions have the potential of influencing pricing trends in the market and manipulating the behaviour of market players.
The order reiterates that while trade associations play an important role in the development of industries, exchange of any commercially sensitive information, including mere discussion of pricing-related matters is strictly prohibited under the competition act.
The PPA was previously fined an amount of Rs50 million for violation of the same provisions of the act in August 2010.
CCP’s legitimacy
The CCP’s decision comes at a time when the authority is trying to establish its writ. Since its inception, the anti-trust watchdog has imposed over Rs26.5 billion penalties. Except in couple of cases, all the parties went to court and obtained stay orders against the decisions.
Some have challenged the existence of the CCP and Lahore High Court is hearing a case, which will determine the future of the anti-trust watchdog and the penalties.
However, the CCP believes that at the end of the day the violators will have to pay the fine. The commission has been established under an Act of Parliament. However, the political parties weakened the CCP when they amended the bill, giving the accused the right to appeal in high courts.
Meanwhile, the association said that it did not have enough funds to pay the fine. “We do not have funds to pay the fine and the association would again try to explain its position to the CCP,” said Khalid Saleem Malik, Central Chairman of the association. He defended the decision of advertising poultry prices and said that the move was aimed at discouraging exorbitant profiteering by intermediaries.
Published in The Express Tribune, March 3rd, 2016.
The anti-trust watchdog has slapped a fine of Rs100 million on the Pakistan Poultry Association (PPA) for illegally fixing the prices of eggs and chicken meat.
The penalty comes amid challenges to the Competition Commission of Pakistan’s (CCP) authority as the violator seems to be exploiting weaknesses of the legal system to avoid payments.
It was for the second time in the last five and a half years when the CCP found the poultry association flouting the Competition Act of 2010. It had also imposed Rs50 million fine on PPA in August 2010. However, the association went to Lahore High Court and got a stay order.
The CCP on Wednesday issued its second order against the PPA, imposing a fine of Rs100 million for price fixing of poultry products in violation of Section 4 of the Competition Act, 2010.
A bench comprising commission chairperson Vadiyya Khalil, member office of fair trade and advocacy Dr Shahzad Ansar and member cartels and trade abuses and legal Ikram Ul Haque Qureshi, has passed the order.
Evidence against PPA
The ruling disposes of the proceedings arising out of the show-cause notice issued to PPA after CCP took notice of a series of advertisements published in various daily newspapers by PPA regarding prices of live broiler chicken, meat and chicken eggs from October 6 to October 12, 2015.
The order finds that by notifying the prices of poultry products under the banner of the association, the PPA has taken an anti-competitive decision in violation of the competition act. It further states that PPA’s actions have the potential of influencing pricing trends in the market and manipulating the behaviour of market players.
The order reiterates that while trade associations play an important role in the development of industries, exchange of any commercially sensitive information, including mere discussion of pricing-related matters is strictly prohibited under the competition act.
The PPA was previously fined an amount of Rs50 million for violation of the same provisions of the act in August 2010.
CCP’s legitimacy
The CCP’s decision comes at a time when the authority is trying to establish its writ. Since its inception, the anti-trust watchdog has imposed over Rs26.5 billion penalties. Except in couple of cases, all the parties went to court and obtained stay orders against the decisions.
Some have challenged the existence of the CCP and Lahore High Court is hearing a case, which will determine the future of the anti-trust watchdog and the penalties.
However, the CCP believes that at the end of the day the violators will have to pay the fine. The commission has been established under an Act of Parliament. However, the political parties weakened the CCP when they amended the bill, giving the accused the right to appeal in high courts.
Meanwhile, the association said that it did not have enough funds to pay the fine. “We do not have funds to pay the fine and the association would again try to explain its position to the CCP,” said Khalid Saleem Malik, Central Chairman of the association. He defended the decision of advertising poultry prices and said that the move was aimed at discouraging exorbitant profiteering by intermediaries.
Published in The Express Tribune, March 3rd, 2016.