The Supreme Court has declared the collective fixing of ghee and cooking oil prices illegal, upholding a Competition Commission of Pakistan (CCP) ruling against the Pakistan Vanaspati Manufacturers Association (PVMA) and directing the association to deposit a fine of Rs30 million.
A two-member bench comprising Justice Jamal Khan Mandokhail and Justice Salahuddin Panhwar upheld the findings of the CCP and the Competition Appellate Tribunal, ruling that the joint fixing of ghee and cooking oil prices violated Section 4 of the Competition Act.
The court affirmed the price-fixing finding of the CCP against the PVMA in the case concerning the determination of ghee and cooking oil prices.
In its verdict, the Supreme Court held that competing businesses must set their prices independently, and that collective price-setting through a trade association restricts competition regardless of whether the resulting price is lower. The court noted that while lower prices may benefit consumers, joint price-fixing among competitors remains a violation of competition law even in such cases.
The court further ruled that a claim of public interest does not legitimize collective price-fixing.
It upheld the core findings of the CCP and the Competition Appellate Tribunal, ruling that each business must independently determine its prices according to its own commercial requirements. Jointly agreed prices, the court said, cannot substitute for prices set through free competition.
The Supreme Court observed that the PVMA should have approached the CCP on pricing matters instead of bypassing it, and that consulting the association on prices while bypassing the CCP amounted to a violation of the Competition Act. It also noted that the federal government should not have been bypassed in the process.
