Govt plans steps to break industry cartels

Finance Division will prepare suggestions to curb collusive practices by sugar, wheat flour industries

ISLAMABAD: The government has decided to chalk out an action plan to tackle collusive market practices, prompted by findings of the Competition Commission of Pakistan (CCP) that sugar and wheat flour millers have formed cartels for dictating their terms in the market.

Sugar and wheat flour millers have sharply increased prices in a bid to extract additional billions of rupees from consumers. Following the price hike, the government sent their cases to the CCP for investigation.

The CCP found that sugar and flour millers had formed cartels and increased product prices to exploit the consumers.

Sources told The Express Tribune that the cabinet, in a recent meeting chaired by Prime Minister Imran Khan, directed the Finance Division and the Industries and Production Division to examine the CCP’s report on wheat flour and sugar prices and come up with recommendations for addressing the issue of collusive practices.

A cabinet member pointed out that the CCCP had probed certain sectors of the economy and concluded that wheat flour and sugar prices were being manipulated through collusive practices. “It is not clear whether the government has taken any action to address the issue,” he said.

Some other members of the cabinet voiced concern over the failure of provincial governments to announce the sugarcane support price despite the arrival of crushing season.

Sugarcane crushing normally starts in November but it has not yet begun which will deprive farmers of better returns.

In a bid to bridge the gap between demand and supply of wheat and flour, the government had imposed a ban on the export of these products in July. Despite the restriction, the flour millers continued to increase prices in the domestic market.

Consequently, the federal government constituted a committee comprising representatives of provincial governments and relevant stakeholders to implement recommendations of the CCP and deter cartelisation, undue profiteering and monopolistic practices.

The National Price Monitoring Committee, in its meeting held on September 6, discussed the increase in prices of essential food items including wheat and flour and constituted the committee.

Railways Minister Sheikh Rashid Ahmed also took up the matter with the Economic Coordination Committee (ECC), pointing out that flour prices were high in the Rawalpindi region.

He said mills had reduced the size of flour bag from 20 kg to 15 kg and termed the move unjustified. He also voiced concern over the wheat stock levels. The minister emphasised that as consumption of wheat flour increased from November onwards, there was a need for vigilance to keep supplies adequate during the period.

Minister for Economic Affairs Hammad Azhar noted that bread (naan) prices were higher in Punjab despite reduction in gas tariffs for the tandoors. He sought details of the agreement reached between the Punjab government and Tandoor Owners’ Association for fixing bread prices.

Pakistan Agricultural Storage and Services Corporation (Passco) and provincial food departments reported wheat stocks of 7.27 million tons as on September 5, 2019 compared to 10.6 million tons at the same time last year.

Published in The Express Tribune, December 5^th, 2019.

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