CCP Resumes Inquiry Against Oil and Ghee Sector for Cartelization

The Competition Commission of Pakistan (CCP) has resumed its inquiry against the cooking oil and ghee sector for alleged cartelization and violations of the Competition Act.

Sources informed Propakistani of the resumed investigation against ghee and cooking oil manufacturers. The Supreme Court of Pakistan (SCP) also admitted to hearing its leave to appeal against them, and has suspended the decision by the Islamabad High Court (IHC) dated 14 September 2021.

The CCP will conclude the inquiry after the completion of legal formalities and the verification of the records submitted by the ghee and cooking oil sector.

It had taken notice of an unexplained increase in the retail prices of vegetable oil and ghee in 2020 and had initiated an inquiry under Section 37 (1) of the Competition Act, 2010 on 30 July 2020 to ascertain prima facie violations of Section 3 and/or Section 4 of the Act in the edible oil and ghee industry. The increase in the process of ghee and cooking oil was unusual as the prices of palm oil, which is the primary raw ingredient in its production had been on a downward trend internationally from January to May 2020.

The inquiry team had sought information from the industry players, and the non-cooperation of some companies had prompted the commission to pass a ‘Call for Information’ order under Section 36 of the Act in November 2020. However, Dalda Foods had obtained a stay order from the Islamabad High Court (IHC) against the order under Section 36 for the provision of information to the CCP on 18 November 2020.

Later on, the IHC had ruled in favour of the petitioner based on its order on 14 September 2021.

The CCP had immediately filed a leave to appeal against the order to the SCP and the case was allotted a hearing on 22 November 2021.

The SCP had granted the CCP leave to appeal to consider the various important legal questions pertaining to the impugned judgment and had suspended the operation of the IHC’s judgment from 14 September 2021 until the final decision for the CCP’s appeal.

The CCP had conducted four searches and inspections of the offices of the Pakistan Vanaspati Manufacturers Association (PVMA) in Islamabad, Lahore, and Karachi, and had impounded several documents and computer-stored information to facilitate its inquiry.