The Competition Commission of Pakistan (CCP) on Tuesday said it is closely monitoring the ongoing sugar crisis, warning strict enforcement and policy actions in case of any anti-competitive activities.
In a statement, the CCP said it has been actively working to curb cartelization in the sugar industry, promoting fair competition and protecting consumers. In 2020, it launched an inquiry into the sector, finding sugar mills were prima facie engaged in price-fixing and controlling supply through coordinated actions facilitated by the Pakistan Sugar Mills Association (PSMA). As part of the investigation, the CCP also conducted raids at PSMA offices.
Resultantly, read the statement, the CCP imposed a record Rs. 44 billion in penalties on sugar mills and the PSMA in August 2021. However, the decision was challenged in courts, and stay orders issued by the Sindh and Lahore high courts, as well as the Competition Appellate Tribunal, delaying the recovery of penalties.
The CCP noted it has consistently intervened to enhance transparency and competitiveness in the sugar sector. Its first inquiry in 2009 found prima facie evidence of the PSMA’s involvement in price-fixing and the manipulation of production and supply quotas. Consequently, the CCP issued show-cause notices to certain sugar mills and the PSMA on July 16, 2010. These proceedings, it said, were subsequently stayed by the Sindh High Court.
The CCP stressed it has issued multiple policy notes—in 2009, 2012, and 2021—recommending the federal and provincial governments to reduce market distortions. Key recommendations included deregulating the sugar sector, allowing market forces to determine prices, and lifting restrictions on the establishment or expansion of sugar mills to encourage competition. In its latest policy note, it said, the CCP advised the government to discontinue the practice of announcing support prices for sugarcane and instead adopt a market-based pricing mechanism. This shift will ensure fair compensation for farmers while fostering efficiency and competition within the sector.
Currently, read the statement, 127 cases related to sugar cartelization are pending in various courts, including 24 in the Supreme Court, 25 in the Lahore High Court, six in the Sindh High Court, and 72 in CAT. To expedite the resolution of these cases, the government has recently appointed a new chairman and members of CAT, it said.