ISLAMABAD – The Competition Appellate Tribunal (CAT) has dismissed the appeal filed by the Pakistan Vanaspati Manufacturers Association (PVMA), upholding the Competition Commission of Pakistan’s (CCP) order imposing Rs50 million penalty for anti-competitive practices.
PVMA, an association representing nearly 100 ghee and cooking oil manufacturers across Pakistan, was found involved in coordinated price hikes in the edible oil sector.
According to the CCP, PVMA had used its platform to orchestrate price-fixing arrangements, whereby it negotiated prices with government authorities and advised its members to implement uniform pricing. Though PVMA claimed these were mere recommendations, the Commission found that such directives were in fact enforced, resulting in reduced price competition.
The CCP also established that PVMA had entered into agreements with oil tanker associations and the National Logistics Cell (NLC) to fix transportation rates. These arrangements, in the Commission’s view, distorted fair competition in the logistics sector and disadvantaged non-member market players.
In addition to collusive pricing and logistics agreements, PVMA was found to have abused its dominant position by charging discriminatory fees for the verification of import invoices—a responsibility delegated to it by customs authorities to address under-invoicing concerns. PVMA charged its own members Rs4 per metric ton for this service, while charging commercial importers Rs10 per metric ton without offering a valid justification.
The CAT observed that the verification service was delegated to PVMA by customs authorities for all importers, and that distinguishing between members and non-members in charging service fees was unjustified. The order stated that such discriminatory charges could not be rationalized under the concept of “objective justification,” especially when the burden of these charges ultimately fell on the members of PVMA.
While the CAT upheld the Rs50 million fine imposed by the CCP, it modified the Commission’s order by granting PVMA a 15-day period to rectify its discriminatory conduct. Should PVMA fail to comply within the stipulated timeframe, an additional penalty of Rs1 million per day of default—originally part of CCP’s order—would be reinstated.
