The Supreme Court (SC) on Wednesday reserved its judgment in an appeal filed by the Vanaspati Manufacturers Association against a penalty imposed by the Competition Commission of Pakistan (CCP) over a reduction in ghee and edible oil prices.
A two-member bench headed by Justice Jamal Khan Mandokhail heard the case.
During the proceedings, counsel for the association argued that the reduction in the prices of ghee and cooking oil had been made at the request of the government and that documentary evidence supporting this position was available on record. He contended that the Competition Commission had initiated proceedings in 2010 on the basis of records from 2008 and imposed a penalty despite the fact that the price reduction had been undertaken in the interest of consumers.
The counsel maintained that the association had acted in response to the government’s request and that the decision ultimately benefited the public by lowering the prices of essential commodities.
Representing the Competition Commission, the commission’s counsel argued that even at the government’s request, an association could not collectively decide on price reductions because trade associations were not legally authorized to determine prices. He submitted that any collective decision relating to prices could distort the competitive environment, whereas genuine price reductions should result from free market competition among individual manufacturers.
During the hearing, Justice Jamal Khan Mandokhail remarked that the root causes of problems were often overlooked in the country. Justice Salahuddin Panhwar observed that a similar issue had arisen in the poultry sector and that a decision imposing a penalty on an association in that case had already been delivered.
Justice Mandokhail further remarked that if the Competition Commission’s stance were accepted in its entirety, it could limit the government’s ability to play an effective role in similar matters in the future.
The Court was informed that the Competition Commission had imposed a fine of Rs 50 million on the association in 2010 in connection with the collective decision regarding the reduction of ghee and edible oil prices.
After hearing arguments from both sides, the Supreme Court reserved its judgment in the appeal.