CCP Issues Notices to 84 Sugar Mills over Cartelization

The Competition Commission of Pakistan (CCP) has issued show-cause notices to the Pakistan Sugar Mills Association (PSMA) and its 84 member mills on multiple instances of prima facie cartelization in violation of Section 4 of the Competition Act 2010.



The show-cause notices have been issued after the CCP decided to initiate proceedings under Section 30 of the Act on the recommendations of an inquiry into the anti-competitive activities in the sugar sector. The CCP’s inquiry has found multiple instances of the Pakistan Sugar Mills Association (PSMA) acting like a front-runner for cartelization in the sugar industry.Evidence gathered during the search and inspections of the premises of the PSMA and JDW Sugar Mills suggests these anti-competitive activities have been going on since 2010.

The impounded data included an exchange of emails between a senior official of one of the sugar mills (Member of PSMA) and the PSMA Punjab zone office bearers regarding sensitive commercial information like mill-wise and district-wise sugar stock positions and the quantities of crushed canes, sugar produced, recovery percentage, carry forward old/raw sugar, total sugar, quantity sold, and the balance and sold percentages.

Moreover, an analysis of WhatsApp messages exchanged in a group of PSMA officials revealed that the same senior official was in constant communication with them regarding the prices and stock-related data of the sugar mills.

The impounded data indicated that the senior official’s continued involvement in sharing/receiving sensitive information regarding the sugar industry was since 2012 when he had been nominated as the focal person for the coordination of the sugar stock position by the PSMA.

Furthermore, the PSMA’s platform was also being used by its member sugar mills to collectively make commercially-sensitive decisions like reductions in domestic stocks/supplies of sugar which led to an increase in or the maintenance of desired price levels in the market.

The PSMA and its members have been given the opportunity of a hearing to plead their case with reference to the prima facie-specific violations indicated therein. The PSMA and all the 84 sugar mills prima facie violated the Act by collectively deciding to export sugar and thereby fixed the quantities of sugar to be supplied within Pakistan. Similarly, they also violated the Act by reducing stocks of sugar through exports which collectively raised and maintained the prices of sugar in Pakistan.

Moreover, in the crushing season 2019-20, fifteen sugar mills in the Punjab under the auspices of the PSMA collectively decided to delay the crushing of sugarcane leading to a reduction in the quantity supplied to the market. , Forty-five sugar mills in the Punjab had used the PSMA’s platform to share business-sensitive information with each other.

Lastly, the PSMA and sugar mills divided quantities of sugar in tenders issued by the USC on various occasions. The CCP found 19 mills in Punjab in violation of the Act with reference to a tender dated 2019 whereas, 30 mills from all over Pakistan have been issued a show cause notice for an earlier tender.

The findings of the CCP’s previous sugar inquiry report in 2009 were that the PSMA and its members had engaged in the fixing of prices and collusion in the purchase of sugarcane, production of sugar, and the sale or trade of sugar.

In the current matter, it appears that the PSMA and its member mills had sought to keep prices stable inter alia by controlling the supply of sugar available in the domestic market.

M/s. Pakistan Sugar Mills Association was found in cartelization in the sugar industry and was issued a notice by the CCP.



The list of sugar mills to whom notices were issued by the CCP is as follows:



PUNJAB
M/s. Abdullah Sugar Mills Ltd.
M/s. Al-Arabia Sugar Mills Ltd.
M/s. Adam Sugar Mills Ltd.
M/s. Ashraf Sugar Mills Ltd.
M/s. Baba Farid Sugar Mills Ltd.
M/s. Brothers Sugar Mills Ltd.
M/s. Chanar Sugar Mills Ltd.
M/s. Chaudhry Sugar Mills Ltd.
M/s. SW Sugar Mills Ltd. (Chishtia)
M/s. Etihad Sugar Mills Ltd.
M/s. Fatima Sugar Mills Ltd.
M/s. Fecto Sugar Mills Ltd.
M/s. Haq Bahu Sugar Mills Ltd.
M/s. Haseeb Waqas Sugar Mills Ltd.
M/s. Hunza I Sugar Mills Ltd.
M/s. Hunza II Sugar Mills Ltd.
M/s. Huda Sugar Mills Ltd.
M/s. Hamza Sugar Mills Ltd.
M/s. Rasool Nawaz Sugar Mills Ltd.
M/s. Husein Sugar Mills Ltd.
M/s. Indus Sugar Mills Ltd.
M/s. Ittefaq Sugar Mills Ltd.
M/s. JDW-I Sugar Mills Ltd.
M/s. JDW-II Sugar Mills Ltd.
M/s. Kashmir Sugar Mills Ltd.
M/s. Kamalia Sugar Mills Ltd.
M/s. Layyah Sugar Mills Ltd.
M/s. Safina Sugar Mills Ltd.
M/s. Macca Sugar Mills (Pvt.) Limited
M/s. Madina Sugar Mills Ltd.
M/s. Noon Sugar Mills Ltd.
M/s. Pattoki Sugar Mills Ltd.
M/s. Ramzan Sugar Mills Ltd.
M/s. Shahtaj Sugar Mills Ltd.
M/s. Shakarganj I Sugar Mills Ltd.
M/s. Shakarganj II Sugar Mills Ltd.
M/s. Sheikhoo Sugar Mills Ltd.
M/s. Tandlianwala I Sugar Mills Ltd.
M/s. Tandlianwala II Sugar Mills Ltd.
M/s. Popular Sugar Mills Ltd.
M/s. RYK Sugar Mills Ltd.
M/s. Jahuarabad Sugar Mills Ltd (Kohinoor)
M/s. JK Sugar Mills Ltd.
M/s. Almoiz II Sugar Mills Ltd.
M/s. Imperial Sugar Mills Ltd.



SINDH



M/s. Abdullah Shah Ghazi Sugar Mills Ltd.
M/s. Al-Abbas Sugar Mills Ltd.
M/s. Al-Noor Sugar Mills Ltd.
M/s. Ansari Sugar Mills Ltd.
M/s. Army Welfare Sugar Mills Ltd.
M/s. Bawany Sugar Mills Ltd.
M/s. Dewan Sugar Mills Ltd.
M/s. Deharki Sugar Mills Ltd.
M/s. Digri Sugar Mills Ltd.
M/s. Faran Sugar Mills Ltd.
M/s. JDW-III Sugar Mills Ltd.
M/s. Habib Sugar Mills Ltd.
M/s. Khairpur Sugar Mills Ltd.
M/s. Khoski Sugar Mills Ltd.
M/s. Kiran Sugar Mills Ltd.
M/s. Larr Sugar Mills Ltd.
M/s. Mataria Sugar Mills Ltd.
M/s. Mehran Sugar Mills Ltd.
M/s. Mirpurkhas Sugar Mills Ltd.
M/s. Mirza Sugar Mills Ltd.
M/s. Najma Sugar Mills Ltd.
M/s. Naudero Sugar Mills Ltd.
M/s. New Dadu Sugar Mills Ltd.
M/s. Pangrio Sugar Mills Ltd.
M/s. Ranipur Sugar Mills Ltd.
M/s. Sakrand Sugar Mills Ltd.
M/s. Sanghar Sugar Mills Ltd.
M/s. Seri Sugar Mills Ltd.
M/s. Shahmurad Sugar Mills Ltd.
M/s. Sindh Abadgars Sugar Mills Ltd.
M/s. SGM Sugar Mills Ltd.
M/s. Tharparkar Sugar Mills Ltd.
M/s. TMK Sugar Mills Ltd.



KPK



M/s. Chashma I Sugar Mills Ltd.
M/s. Chashma II Sugar Mills Ltd.
M/s. Al-Moiz Industries (Unit-I)
M/s. Premier Sugar Mills Ltd.
M/s. Khazana Sugar Mills Ltd.
M/s. Tandlianwala Sugar Mills Ltd (Zamand)