ISLAMABAD: The Competition Commission of Pakistan (CCP) has crack down on collusion in fertilizer sector, imposed Rs 375 million in fines on leading fertilizer industry associations.
The Competition Commission of Pakistan has taken decisive action against anti-competitive conduct in the fertilizer sector, imposing a penalty of Rs 50 million on each of the six major Urea Manufacturers, and also a penalty of Rs 75 million on a leading industry association/FMPAC, totaling Rs375 million in fines, said a press release issued here on Wednesday.
Following a detailed inquiry initiated suo motu, the Commission’s Bench comprising Dr. Kabir Ahmed Sidhu and Mr. Salam Amin concluded that six urea manufacturing companies, i.e. M/s Fatima Fertilizer Limited, M/s Fauji Fertilizer Company Limited, M/s Fauji Fertilizer Bin Qasim Limited, M/s Fatima Fertilizer Company Limited , M/s Engro Fertilizer Company Limited and M/s Agritech Limited in coordination with their trade association, FMPAC.
Under the guise of conducting an awareness campaign/advertisement, have effectively fixed the price of urea across the country. Such conduct goes beyond the bounds of lawful information dissemination and enters into the realm of anti-competitive behavior in violation of Section 4 of the Competition Act, 2010.
Despite claiming price independence, the manufacturers failed to justify their synchronized pricing strategy.
The Commission’s investigation uncovered that the conduct not only distorted competition, but also harmed farmers across Pakistan, especially during the critical Rabi and Kharif season, by artificially influencing fertilizer prices and limiting market choice.
The Respondents’ attempt to claim protection under the ‘state action doctrine’ was also rejected.Drones
The Bench held that no formal government directive or compulsion existed to justify their collusive behavior.
