The Supreme Court of Pakistan has upheld a competition law violation against the Pakistan Vanaspati Manufacturers Association (PVMA).
The case involved the collective fixing of ghee and cooking oil prices. The court found that PVMA had acted against competition law.
A two-member bench heard the case. The bench included Justice Jamal Khan Mandokhail and Justice Salahuddin Panhwar.
The Supreme Court also upheld findings made by the Competition Commission of Pakistan (CCP). It further supported the decision of the Competition Appellate Tribunal (CAT).
The court ordered PVMA to pay a penalty of Rs. 30 million. The amount was linked to the association’s price-fixing activities.
Case Dates Back to 2007-09
The case relates to discussions between the federal government and PVMA. These discussions took place between 2007 and 2009.
At that time, the government wanted lower prices for ghee and cooking oil. PVMA participated in discussions concerning these prices.
The association later communicated the agreed prices to its member companies. The CCP considered this action a violation of competition rules.
According to the CCP, PVMA negotiated prices for its members. It also collectively determined prices with the government.
The commission found that this conduct violated Section 4 of the Competition Act, 2010.
The CCP initially imposed a Rs. 50 million penalty on PVMA. The Competition Appellate Tribunal later upheld the commission’s findings.
PVMA challenged the matter before the Supreme Court. The court has now upheld the core finding against the association.
Court Explains Independent Pricing
The court stressed that competing businesses must make their pricing decisions independently.
Businesses cannot collectively decide prices through an industry association. Such coordination can affect competition within the market.
The court also rejected PVMA’s argument concerning lower prices.
It noted that the legality of the arrangement did not depend on whether prices were higher or lower.
The central issue was the collective nature of the pricing decision. Competing businesses should make their own commercial decisions.
The court further addressed the public interest argument raised in the case.
It held that an arrangement cannot avoid competition law simply because it aims to benefit consumers or the public.
The ruling reinforces the importance of independent pricing among competing businesses. It also confirms the role of competition authorities in addressing price-fixing practices.
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Following the ruling, PVMA was directed to deposit Rs. 30 million. The decision brings the long-running competition case closer to final resolution.
