The Competition Commission of Pakistan (CCP) has issued fresh notices to the ghee and cooking oil manufacturers for the provision of information about their production, capacity, and sales data for 2020-21 and 2021-22.
The notices have directed the companies to provide information about their market share, sales of ghee and cooking oil in the market, and financial statements (for the fiscal year 2018 to the fiscal year 2022).
The CCP has also directed the companies to share information about the retail prices of brands offered by the ghee and cooking oil manufacturers and a tier-wise list of brands and competitors’ brands.
Background
The CCP had resumed its inquiry related to the cooking oil and ghee sector last year after the Supreme Court of Pakistan admitted for hearing its leave to appeal against, and suspended, the decision of the Islamabad High Court dated 14 September 2021.
On 30 July 2020, the CCP, taking notice of an unexplained increase in the retail prices of vegetable oil and ghee, initiated an inquiry under Section 37 (1) of the Competition Act, 2010 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 ghee/cooking oil prices was unusual as palm oil prices, the primary raw material in its manufacturing, witnessed a downward trend internationally during January-May 2020.
The inquiry team sought information and relevant data from the industry players. Upon non-cooperation from some companies in sharing the data, the commission passed a ‘Call for Information’ order under Section 36 of the Act in November 2020.
However, one of the companies, Dalda Foods, obtained a stay order from the Islamabad High Court against the Section 36 order for providing information to the commission on 18 November 2020. Later, the Islamabad High Court through its order dated 14 September 2021 ruled in favor of the petitioner.
The commission immediately filed a leave to appeal against the order before the august Supreme Court of Pakistan and the case was fixed for hearing on 22 November 2021.
The SC granted leave to appeal to CCP in order to consider the various important legal questions which had arisen in relation to the impugned judgment. In the meantime, the SC also suspended the operation of the judgment of the IHC dated 14 September 2021, till the final decision of CCP’s appeal before the Supreme Court. Accordingly, CCP resumed its inquiry.
It should be noted that on 8 July 2021, the CCP carried out four searches and inspections on the offices of the Pakistan Vanaspati Manufacturers Association (PVMA) in Islamabad, Lahore, and Karachi, and impounded several documents and computer-stored information to assist in its inquiry.
