SC upholds CCP penalty on PVMA
ISLAMABAD: The Supreme Court upheld the Competition Commission of Pakistan’s (CCP) decision to impose a Rs50 million penalty on the Pakistan Vanaspati Manufacturers Association (PVMA) for violating Section 4 of the Competition Act, 2010. A two-member bench comprising Justice Jamal Khan Mandokhail and Justice Salahuddin Panhwar observed that although the appellant had acted at the instance of the…
The Supreme Court has upheld the Competition Commission of Pakistan's (CCP) decision to impose a Rs50 million penalty on the Pakistan Vanaspati Manufacturers Association (PVMA) for breaching Section 4 of the Competition Act, 2010. The Court's two-member bench, consisting of Justice Jamal Khan Mandokhail and Justice Salahuddin Panhwar, determined that while the PVMA acted at the federal government's request, the penalty was disproportionate given the circumstances.
Between 2007 and 2009, the government encouraged the ghee and cooking oil industry to pass on the benefits of falling international palm oil prices to consumers. In response, manufacturers reduced the prices of ghee and cooking oil. The CCP imposed the penalty in June 2011, but the PVMA appealed to the Competition Appellate Tribunal, which later affirmed the Commission's decision.
The Court's judgment emphasized that the federal government is responsible for maintaining the independence of the Commission and that collective price determination by an association representing competing entities violates competition laws. The Court noted that while the government's objective of reducing consumer prices was noble, the resulting collective price-setting undermines independent pricing decisions.
The penalty, the Court said, is a last resort measure to be used when the Commission's other efforts to promote competition have failed.
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