Competition Appellate Tribunal Verdict on Flour Mills Association

The Competition Appellate Tribunal (CAT) has validated the decision made by the Competition Commission of Pakistan (CCP) against the Pakistan Flour Mills Association (PFMA) concerning the “fixing of wheat flour prices.” According to a statement released by the CCP on Tuesday, the CAT has, however, reduced the imposed fine to Rs35 million. The CCP’s initial order in 2019 had set the fine at Rs75 million.

Back in 2019, the CCP had determined that the PFMA was manipulating the wheat grinding quota for its member mills, resulting in an increase in flour costs across the nation.

The PFMA subsequently appealed the CCP’s order to the CAT.

According to the CCP’s statement, their legal counsel argued that Sections 4(1) and 4(2)(a) of the Competition Act, 2010, explicitly disallow any agreements or understandings among businesses, including associations, that aim to control prices.

CCP’s Stance

“The CCP asserted that the systematic issuance of price directives by the PFMA undermined the commercial independence of individual mills, thus forming a horizontal agreement with an anti-competitive purpose.”

After reviewing arguments from all parties and examining relevant documentation, the tribunal confirmed the CCP’s conclusions but lowered the imposed penalty to Rs35 million.