CCP issues notices to Punjab sugar mills

Accuses mills of jointly deciding to delay crushing, fixing cane purchase price

ISLAMABAD:

The Competition Commission of Pakistan (CCP) has issued show-cause notices to 10 sugar mills in Punjab for colluding in relation to the start of crushing season and fixing the sugarcane procurement price at Rs400 per maund.

A CCP review found that representatives of these mills held a meeting on November 10, 2025 where they decided to commence crushing on November 28, instead of the Punjab Sugarcane Commissioner's officially notified date of November 15. The mills also agreed to fix the cane purchase price at Rs400 per maund, an act that constitutes collusive decision-making.

The meeting was chaired by the resident director of Fatima Sugar Mills and attended by representatives of Sheikhoo Sugar Mills, Thal Industries Corporation, Tandlianwala Sugar Mills (Rehman Hajra Unit), JK-1 Sugar Mills, Ashraf Sugar Mills and Kashmir Sugar Mills, while Siraj Sugar Mills, Two Star Sugar Mills and Haq Bahoo Sugar Mills joined online.

Under Section 4 of the Competition Act, 2010, any agreement or arrangement between market players to fix prices or coordinate on business decisions is strictly prohibited and constitutes a violation of competition law.

There is a significant imbalance in negotiation power between sugar mill owners and farmers. Ideally, the sugarcane price should be determined through individual negotiations between each mill and farmers, based on the natural interplay of demand and supply.

However, instead of allowing market forces to operate, all mill owners collectively and unilaterally fixed the price at Rs400 per 40 kg.

The CCP has directed all 10 mills to submit a written response within 14 days, explaining why legal proceedings should not be initiated against them for entering into prohibited agreements, influencing the sugarcane market and gaining undue commercial advantage through a coordinated delay in crushing.