CCP Penalties Prompt Review by United Distributors and International Brands

Following the imposition of penalties by the Competition Commission of Pakistan (CCP), United Distributors Pakistan Limited (UDPL) and International Brands (Private) Limited (IBL) have announced they are evaluating the order and exploring potential legal avenues.

UDPL, a manufacturer of pesticides and fertilizers, communicated this development in a filing to the Pakistan Stock Exchange (PSX) on Friday.

According to the notification, “The CCP initiated proceedings against UDPL and IBL regarding a non-compete agreement between the parties, about which the company has consistently made disclosures under applicable law, most recently on May 15, 2024.”

Firms Found Guilty of Anti-Competitive Agreement

The CCP determined that UDPL and IBL were culpable in an anti-competitive agreement valued at Rs1.13 billion. Consequently, a total penalty of Rs42 million was levied on both entities for engaging in and enacting the non-compete agreement, which the commission stated violated Section 4 of the Competition Act, 2010.

In a statement released on Wednesday, the CCP asserted that the agreement constituted an unlawful market-sharing arrangement that suppressed competition and was implemented in clear violation of the law.

UDPL, in its Friday statement, contended that the companies had maintained transparency regarding the agreement and had made numerous disclosures, the most recent of which occurred on May 15, 2024.

“While the actual execution of the restrictive arrangement under the aforementioned agreement was (and remains) contingent upon obtaining the necessary exemption from the CCP, regrettably, due to certain internal delays in acquiring the required information, the company and IBL were unable to submit the exemption application promptly.

Prior to the submission, the CCP issued show-cause notices to the companies based on the company having received consideration under the agreement from IBL, a fact the CCP became aware of through the company’s transparent disclosures,” UDPL clarified.

The company also indicated that an exemption application had subsequently been filed by the parties and is currently under review.

UDPL asserted that it “has consistently been transparent in its disclosures, demonstrating its commitment to complying with all applicable laws.”

“Consequently, pursuant to an order dated July 2, 2025, which the company received on July 3, 2025, the CCP has, among other things, imposed a penalty of Rs21,000,000/- on the company for allegedly acting upon the restrictive arrangement and disclosing it without seeking prior clearance/exemption from the CCP.”

The company further stated that “UDPL, along with IBL, are currently reviewing the order and seeking advice regarding appropriate remedies, as the parties believe there are compelling grounds in favor of the companies and their actions.”

The CCP imposed penalties of Rs20 million each on UDPL and IBL for contravening Section 4(1) and 4(2)(b) of the Act. An additional penalty of Rs1 million was imposed on UDPL under Section 38 for making disclosures to the PSX without obtaining regulatory clearance.