ISLAMABAD: The Competition Appellate Tribunal (CAT) has provided significant relief to the Pakistan Flour Mills Association (PFMA) by reducing a PKR 75 million penalty imposed by the Competition Commission of Pakistan (CCP) to PKR 35 million.
However, the Tribunal upheld CCP’s findings that the Association was involved in fixing wheat flour prices in violation of Section 4 of the Competition Act, 2010.
The case originated after CCP launched an inquiry on the basis of multiple news reports highlighting a sudden and unusual increase in wheat flour prices across the country. The inquiry concluded that PFMA was engaged in anti-competitive practices, including issuing structured price instructions to its members and coordinating production quantities.
PFMA challenged CCP’s decision before the Tribunal, seeking to overturn both the findings and the fine. CCP’s counsel argued that Sections 4(1) and 4(2)(a) of the Competition Act strictly prohibit agreements or decisions between undertakings, including associations, that aim to fix prices. According to CCP, PFMA’s repeated issuance of price instructions effectively displaced the commercial independence of individual flour mills, amounting to a horizontal agreement with an anti-competitive object.
After reviewing the record and hearing arguments from both sides, the Tribunal agreed with CCP’s conclusions on PFMA’s conduct but reduced the fine to PKR 35 million.
Reaffirming the Commission’s stance on fair market practices, CCP Chairman Dr. Kabir Ahmed Sidhu warned business associations against using their platforms to share sensitive pricing information or engage in collusive arrangements to maximize profits.
