SC orders poultry association to pay Rs25m fine in cartel case

ISLAMABAD: While petitions against penalties of over Rs74 billion imposed by the Competition Com­mission of Pakistan (CCP) are still pending, the Supreme Court has decided the first-ever cartel case against the poultry association.

In its verdict, the apex court upheld the CCP order of Feb 29, 2016 against the Pakistan Poultry Associa­tion (PPA) related to price fixing.

The case relates to an order passed by the CCP in 2010, and after moving through various legal forums, the PPA filed an appeal against the decision in the Competition Appellate Tribunal, but lost the case there and later filed an appeal against the decision in the apex court.

The CCP had imposed a fine of Rs100 million on PPA for price fixing of poultry products, which was a violation of Section 4 of the Competition Act 2010, which relates to cartelisation and collective price setting, etc.

The three-member bench comprising Justice Ijaz ul Ahsan, Justice Munib Akhtar and Justice Sayyed Mazahar Ali Akbar Naqvi reduced the penalty from Rs100m to Rs25m and ordered the PPA to pay the amount within 15 days.

Verdict comes six years after CCP imposed Rs100m fine on PPA

At the same time, the apex court also directed the CCP to “frame and notify relevant rules inter alia relating to imposition of penalties.” Currently, there exist guidelines on the imposition of financial penalties.

Under Section 57 of the Competition Act, the commission, with the appro­val of the federal government, has the power to make rules.

The CCP order was issued after a thorough inquiry that found that PPA had inter alia discussed and approved the advertisement of prices of certain poultry products concerning broiler chicken and chicken eggs in the national press, which was prohibited under the Competition Act.

In its order against the PPA, the Competition Tribunal held that by advertising prices of the poultry products in the national press the appellant has prevented, restricted and reduced competition within the relevant market, which is a clear violation of section 4 of the act. The PPA had filed an appeal against the order before the top court.

The CCP has time and again highlighted collusive/anti-competitive practices in the poultry sector. The first case against the poultry sector was taken up in 2010 when the CCP issued show-cause notices against 25 PPA members and imposed a Rs50m fine for price fixing.