The Supreme Court has declared it illegal for businesses to collectively determine the prices of ghee and cooking oil.
According to media reports, while hearing a case concerning the determination of ghee and cooking oil prices, the Supreme Court upheld the Competition Commission of Pakistan’s (CCP) decision against collective price-setting and directed the Pakistan Vanaspati Manufacturers Association (PVMA) to pay a fine of Rs30 million.
The apex court upheld the CCP’s finding of price-fixing against the PVMA.
A two-member bench comprising Justice Jamal Khan Mandokhail and Justice Salahuddin Panhwar endorsed the positions of the CCP and the Competition Appellate Tribunal, ruling that collectively determining the prices of ghee and cooking oil violates Section 4 of the Competition Act.
The Supreme Court stated that competing businesses must independently determine their prices. Collective price-setting through a trade association also restricts competition. Even if the agreed price is lower and benefits consumers, businesses cannot collectively fix prices.
The court further observed that the public interest cannot be used to justify collective price-fixing. It upheld the key findings of the CCP and the Competition Appellate Tribunal and ruled that each business must independently set prices according to its commercial requirements.
The court said collective price-setting cannot replace independent competitive pricing. It observed that the PVMA should have approached the CCP on pricing matters rather than bypassing the regulator and consulting collectively on prices.
In short: Pakistan’s Supreme Court has upheld the Rs30 million fine and ruled that ghee and cooking oil manufacturers must set prices independently rather than through collective agreements.
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