2025 CLD 355 COMPETITION COMMISSION OF PAKISTAN

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VS Ss. 2(1)(b), 2(1)(q), 4(1) & 4(2)(a)---Price of fresh milk (in Karachi), fixing of---Dairy and Cattle Farmers Associations as Association of 'undertakings', role of ---Anti-competitive practices---Whether the number of Dairy and Cattle Farmers Associations based on different level/cities (Respondents/Associations being Undertakings) were responsible for price hike of fresh milk in Karachi---Held, that despite absence of compelling evidence regarding the element of coercion upon wholesalers and retailers, statements/ findings recorded by the Enquiry Committee/Report reveal that both wholesalers and retailers are bound / restrained to follow the rates fixed by the Respondents / Associations , and both cannot afford to go against the rates set by the Respondents / Associations, as the Respondents / Associations will stop the milk supply to them and create an artificial shortage of milk by hoarding it in ice factories and then selling that milk in interior Sindh---Wholesalers and retailers, admitted during the hearing, that they primarily follow the presidents of the Respondents / Association directly or indirectly, at different stages---The legitimate role of any association is to serve as a link between the traders and the Government by representing their interest and assisting in favorable policy formulation and its implementation---It plays a pivotal role in standardization, supporting growth and development of particular sector and benefit to the public in the longer run---Thus, the Respondents/Associations have the ability to influence fresh milk prices in Karachi---Video evidence and testimonies support the claim that the Respondents/Associations exert substantial influence over bhandi rates, mandi rates, wholesale rate and in turn retail prices of the milk---The exercise of the said control as well as the evidence of coordination among the Respondents / Associations is glaringly obvious---Had other parties not adhered to the prices set by the Respondents, there would have been some price competition among the milk producers and retailers operating across various districts of Karachi, which suggests that the Respondents / Associations effectively suppressed natural equilibrium in the absence of Commissioner Karachi's price setting role and hindered the emergence of competition among dairy farmers---Thus, the Respondents / Associations have colluded on pricing mechanism of the sale of fresh milk which is contravention of Ss. 4(1) & 4(2)(a) of the Competition Act, 2010---Competition Commission of Pakistan imposed a lenient financial penalty on Respondents / Associations while directing them to submit a written commitment to the Commission that they will refrain from engaging in any form of market abuse, manipulation or any other anti-competitive practices prohibited under the Competition Act, 2010---Show-Cause Notice against the Dairy and Cattle Farmers Associations succeeded accordingly.

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