Tag Archives: (CCP)

Competition Commission of Pakistan releases meat sector report for public comments

Islamabad, August 31, 2016 (PPI-OT):The Competition Commission of Pakistan has released a study on the meat sector in Pakistan for public comments, covering issues such as price monitoring and quality of meat and also exploring the growth potential of the sector. The study has been conducted as part of the assessments the CCP undertakes to understand competition issues in sectors that have implications for consumers. Meat is one of the heaviest weighed essential food items in the Consumer Price Index (CPI). The livestock sector fulfils the country’s meat, milk and poultry demand.

CCP in its report has identified ineffective price and quality monitoring at the district level that result in high price and low quality of meat that affects both urban and rural consumers. Smuggling of animals to neighbouring Afghanistan is also an issue that affects availability at affordable price to domestic consumers.

Meat production in Pakistan is mostly an unregulated informal activity. The meat industry is marred with many challenges including the low yield per animal, poor animal feed, lack of awareness among livestock breeders related to breeds and veterinary care, and disease control. Also, poor slaughtering methods and lack of accessibility to the Animal Mandis (markets) leads to low quality of meat products and excessive pricing.

The report says that establishing new slaughterhouses and improving facilities at the existing ones is necessary to ensure quality safeguards. Moreover, increasing the accessibility of farmers to the Animal Mandis is essential for providing quality meat to the consumers at reasonable prices.

Therefore, CCP recommends a public-private partnership to run the government slaughterhouses for efficiency and quality and to increase animal mandis so that farmers can easily access them. CCP also recommends that price setting, which takes place every six to twelve months, needs to be regulated during the interim periods and meat prices should be based on both the quality of the meat and its grading.

Another market identified by CCP is the growing international demand for Halal meat and meat products. The demand for Halal meat has been growing globally. Pakistan produces 100 percent Halal meat and export of halal meat and meat products can be a significant source of foreign exchange earnings.

CCP has acknowledged efforts of the Government especially the Ministry of National Food Security and Research, which has undertaken certain regulatory measures to encourage livestock sector and for the establishment of value added meat market in the country. Section 28 of the Competition Act empowers CCP to conduct studies for promoting competition in all sectors of commercial economic activity. The study on meat sector is available on the Commission’s website, www.cc.gov.pk.

For more information, contact:
Asfandyar Khattak
Director (Media and Communications)
Competition Commission of Pakistan (CCP)
7th Floor South, ISE Towers,
55-B, Jinnah Avenue, Islamabad, Pakistan
Tel: +92-51-9100260-3, +92-51-9100256
Fax: +92-51-9100251
Email: akhattak@cc.gov.pk
Website: www.cc.gov.pk

Competition Commission of Pakistan issues show cause notice to Proctor and Gamble Pakistan for deceptive marketing practises

Islamabad, March 15, 2016 (PPI-OT): The Competition Commission of Pakistan (CCP) while concluding an enquiry has issued a show cause notice to Proctor and Gamble Pakistan (Pvt.) Limited for indulging in alleged deceptive marketing practices in violation of Section 10 of the Competition Act, 2010.

CCP received a complaint from Reckitt Benckiser (Pakistan) Limited alleging that Proctor and Gamble had launched a marketing campaign for one of its products, ‘Safeguard’, wherein the company claimed without reasonable basis that Safeguard is “Pakistan’s No.1 Rated Anti-bacterial Soap.”

An enquiry conducted by the CCP’s Office of Fair Trade (OFT) into the matter concluded that Proctor and Gamble failed to provide substantial justification for its product ‘Safeguard” being “Pakistan’s No.1 Rated Anti-bacterial Soap.” According to the enquiry, the false claim has thus resulted in distribution of false and/or misleading information to consumers related to the quality of their product, Safeguard in violation of Section 10 of the Competition Act.

It further stated that due to this claim, the general public may interpret Safeguard to be Pakistan’s No.1 anti-bacterial soap, in contrast to the facts, leading them to prefer Safeguard over other competing anti-bacterial soaps. This conduct is capable of harming the business interests of its competitors including Reckitt Benckiser (Pakistan) Limited, which is a violation of Section 10 of the Act.

Therefore, a show cause notice has been issued to Proctor and Gamble Pakistan (Pvt.) Limited and the company has been called upon for hearing on a given date. CCP is mandated under the Competition Act, 2010 to ensure fair competition in all spheres of commercial and economic activity to enhance economic efficiency and to protect consumers from anti-competitive practices including deceptive marketing.

For more information, contact:
Asfandyar Khattak
Director (Media and Communications)
Competition Commission of Pakistan (CCP)
7th Floor South, ISE Towers,
55-B, Jinnah Avenue, Islamabad, Pakistan
Tel: +92-51-9100260-3, +92-51-9100256
Fax: +92-51-9100251
Email: akhattak@cc.gov.pk
Website: www.cc.gov.pk

Competition Commission of Pakistan issues show cause notice to company for deceptive marketing practices

Islamabad, March 14, 2016 (PPI-OT):The Competition Commission of Pakistan (CCP) while concluding an enquiry has issued a show cause notice to Colgate-Palmolive Pakistan Limited for prima facie indulging into deceptive marketing practices in violation of Section 10 of the Competition Act, 2010.

CCP had received a complaint from Reckitt Benckiser Pakistan Limited alleging that Colgate-Palmolive Pakistan Limited, while marketing its products ‘Max All Purpose Cleaner’ (Max APC), used claims of “99.9% Bacteria Free” and “24 Hours Long Lasting Freshness” on the outer packaging of their product, along with claims that the product protects against “Cold and Flu”, “Skin Infections” and “Food Poisoning”, with a disclaimer reading “Based on laboratory testing with concentrate usage”, without any reasonable basis.

The complaint further alleged that Colgate-Palmolive Pakistan Limited issued a trade letter which stated that Max APC offered for a lesser price a quantity of 50ml more than Reckitt Benckiser Pakistan Limited’s product ‘Dettol Surface Cleaner’ (Dettol). They also suggested that Max APC is a more effective product than Dettol, thereby discrediting the properties and use of Dettol, without any result based testing to substantiate the same.

CCP’s Office of Fair Trade (OFT) initiated an enquiry against the claims made by Colgate-Palmolive Pakistan Limited and concluded that the Respondent had indeed been using the respective claims without sufficient test based results to substantiate the same, thereby violating Section 10 of the Competition Act.

A show cause notice has been issued to Colgate-Palmolive Pakistan Limited and the company has been called upon for hearing on a given date. CCP is mandated under the Competition Act to ensure fair competition in all spheres of commercial and economic activity to enhance economic efficiency and to protect consumers from deceptive marketing practices.

For more information, contact:
Asfandyar Khattak
Director (Media and Communications)
Competition Commission of Pakistan (CCP)
7th Floor South, ISE Towers,
55-B, Jinnah Avenue, Islamabad, Pakistan
Tel: +92-51-9100260-3, +92-51-9100256
Fax: +92-51-9100251
Email: akhattak@cc.gov.pk
Website: www.cc.gov.pk

Competition Commission of Pakistan approves Pakistan State Oil’s acquisition of upto 26.67percent shareholding in Pakistan Refinery Limited

Islamabad, March 04, 2016 (PPI-OT): The Competition Commission of Pakistan (CCP) has granted approval to the acquisition of upto 26.67% shares in Pakistan Refinery Limited (PRL) by Pakistan State Oil Company Limited (PSO). PRL is a local refinery producing various refined petroleum products such as motor gasoline, kerosene, and diesel oil for supply to oil marketing companies. PSO is an oil marketing company engaged in the supply of refined petroleum products to end consumers.

The approval in form of an order under Section 11 read with Section 31 of the Competition Act, 2010 (the ‘Act’) was passed by a bench comprising Ms. Vadiyya Khalil, Chairperson, Mr. Ikram Ul Haque Qureshi, Member (Cartels and Trade Abuses, and Legal) and Dr. Shahzad Ansar, Member (OFT and Advocacy). While passing the order, CCP has also disposed of a complaint filed by Hascol Petroleum Limited (Hascol) regarding potential discontinuation of supply of refined petroleum products by PRL to PSO’s competitors after the acquisition.

CCP observed that the acquisition of PRL’s shares by PSO would not substantially lessen competition in the market. It was noted that PRL’s share in the local refined petroleum product market was around 10% and that local refineries including PRL collectively supply less than 50% of the total demand of refined petroleum products in Pakistan while the rest is met by imports undertaken by Oil Marketing Companies (OMCs) themselves.

With imports being readily available, PSO would have no incentive to foreclose the supply of refined petroleum products from PRL to its competitors such as Hascol. Furthermore, with downstream petroleum industry heavy regulated by Oil and Gas Regulatory Authority, there is no chance of PSO raising prices for competitors or end consumers.

CCP further observed that Hascol’s concerns were not acquisition-specific. While disposing off Hascol’s complaint and allowing the acquisition, CCP directed both PSO and PRL not to engage in any form of exclusionary conduct, and to continue offering its refined petroleum products to other OMCs including Hascol on commercially viable and competitive terms. In the event that any anti-competitive behaviour is brought to the knowledge of CCP, the parties in question would be proceeded against in accordance with the law.

For more information, contact:
Asfandyar Khattak
Director (Media and Communications)
Competition Commission of Pakistan (CCP)
7th Floor South, ISE Towers,
55-B, Jinnah Avenue, Islamabad, Pakistan
Tel: +92-51-9100260-3, +92-51-9100256
Fax: +92-51-9100251
Email: akhattak@cc.gov.pk
Website: www.cc.gov.pk

Competition Commission of Pakistan concludes enquiry into alleged exorbitant increase in airfares by private carriers

Islamabad, February 22, 2016 (PPI-OT):The Competition Commission of Pakistan (CCP) has completed its enquiry into the alleged exorbitant increase in airfares by Airblue and Shaheen. The Commission had taken notice of concerns expressed over the media and other forums relating to the conduct of the two private carriers during the suspension of PIA flight operations from October 1-7 2015 and February 2-9, 2016. It was alleged that fares had been hiked by as much as 300%.

A five member Enquiry Committee was appointed to determine whether the private operators had exploited consumers during the time period under review by charging exorbitantly high airfares. Airblue and Shaheen were asked to submit detailed information on airfares charged for each passenger on domestic routes for the period under investigation as well as the preceding months. The Commission also issued a press release asking consumers to come forward and provide evidence of tickets purchased at high rates.

It was observed that as per standard industry practice worldwide Airblue and Shaheen employ a Revenue Management System allowing them to set different parameters for determining the basic fare some of which are demand and supply, size of the aircraft, the route, time of booking ticket, passenger load on other airlines etc. The lowest fares are invoked when the booking is made well in advance, as the time of the flight approaches near the higher fare classes are invoked depending on the availability of seats.

The Enquiry Committee analyzed airfares on the major domestic routes of Karachi-Islamabad, Islamabad-Karachi, Karachi-Lahore and Lahore-Karachi. The airfares charged when PIA flight operations were suspended were compared with airfares charged under normal market conditions i.e. the months immediately preceding each strike. The results show that for Airblue on average the change in fares when compared with immediately preceding month ranged from PKR 159 to a maximum of PKR 2,766.

The maximum increase of PKR 2,766 can be attributed to the operation of two special flights between Karachi and Islamabad in the period of 2-4 February. Fares on this flight were higher due to special arrangements made (arrangement of aircraft, crew, fuel etc.) and last minute bookings to facilitate customers of PIA. For Shaheen the change in average airfares when compared with immediately preceding month ranged from a fall of PKR 320 to a maximum increase of PKR 1,933.

While comparing fares charged during annual peak season, in the month of July when demand is at its highest, with the maximum fares charged during the period under review, the Enquiry Committee observed that the fares during the period under investigation were lower than those charged during the peak season. The Enquiry Committee also observed that the average fares of PIA are generally higher than the two private airlines.

It was concluded from the analysis of the data that on the routes examined the increase in airfares was not as exorbitant as was alleged rather the increase was merely due to an increase in demand and the normal operation of the Revenue Management System whereby last minute bookings are charged a higher rate. The Enquiry Committee did not receive any evidence from consumers to substantiate a three-fold increase.

While finalizing its conclusions the Enquiry Committee took into consideration the fact that normal market conditions were restored once the strikes were called off. As per international practices competition agencies refrain from interventions if the market has the ability to auto-correct as has happened in the instant case. Therefore, after a thorough analysis of facts and data before it the Enquiry Committee concluded that no prima facie violation of Section 3 (Abuse of dominant position) of the Competition Act, 2010 was made out.

After reviewing the Enquiry Report the Commission has decided to conduct a comprehensive competition assessment study on the aviation sector. The study will analyze entry barriers, regulatory measures and the possible policy level competition issues in pricing of airfares. It is important to highlight that the Commission can undertake sector studies under Section 37 of the Competition Act, 2010 with a focus to remedy potential competition concerns to allow for maximum competition in the industry leading to better choices and prices for consumers and a level playing field for businesses.

For more information, contact:
Asfandyar Khattak
Director (Media and Communications)
Competition Commission of Pakistan (CCP)
7th Floor South, ISE Towers,
55-B, Jinnah Avenue, Islamabad, Pakistan
Tel: +92-51-9100260-3, +92-51-9100256
Fax: +92-51-9100251
Email: akhattak@cc.gov.pk
Website: www.cc.gov.pk

Competition Commission of Pakistan imposes penalties over Rs 26 billion in 8 years to ensure free competition in economy: Member

Sargodha, December 23, 2015 (PPI-OT): The Competition Commission of Pakistan (CCP) has imposed total penalties of over 26 billion rupees on different undertakings for various violations of the Competition Law since 2007, aimed to protect consumers from anti-competitive practices and restore and ensure free competition in the country’s economy.

This was stated by CCP Member Cartels and Trade Abuses and Legal, Ikram Ul Haque Qureshi, while addressing a seminar at the Sargodha Chamber of Commerce and Industry (SCCI), jointly organised by CCP and SCCI as part of the National Road Show on Competition Law. The seminar was also addressed by Shahzad Ansar, Member Office of Fair Trade (OFT) and Advocacy, Mukhtar Mirza, President SCCI, Muhammad Shakir Naveed, Senior Vice President SCCI, Amjad Javed, Vice President, Asfandyar Khattak, Director Advocacy CCP, members of the executive council and general body of SCCI and the business community in large number.

Mukhtar Mirza, President SCCI, in his welcome speech highlighted certain competition issues in the area and requested CCP to take action to restore competition. He urged the business community to fully understand the provisions of the Competition Act and improve compliance. He requested CCP for holding more such seminars as there was a dire need to create awareness of the law.

Ikram Ul Haque Qureshi briefed the participants about the competition regime in Pakistan and explained the substantive provisions of the Competition Act, 2010. He said that the purpose of the Competition Act is to ensure free competition in all spheres of commercial and economic activity and CCP is authorized to take action against anti-competitive activities such as abuse of dominance, prohibited agreements and deceptive marketing. “The purpose of imposing these restrictions is to ensure free competition among firms,” he said.

He further said that anti-competitive activities not only distort competition in the market, it also harm consumers’ interests and inflict losses to the national economy. Shahzad Ansar, Member CCP in his presentation on the Office of Fair Trade (OFT), said that the Competition Act protects the consumer from deceptive marketing practices adding that the Competition Act forbids false and deceptive claims having no reasonable basis and the fraudulent use of the trademarks of other undertakings. He said that deceptive marketing practices not only harmed the end consumers but also the businesses who might lose their genuine market share due to fake advertising by others.

For more information, contact:
Asfandyar Khattak
Director (Media and Communications)
Competition Commission of Pakistan (CCP)
7th Floor South, ISE Towers,
55-B, Jinnah Avenue, Islamabad, Pakistan
Tel: +92-51-9100260-3, +92-51-9100256
Fax: +92-51-9100251
Email: akhattak@cc.gov.pk
Website: www.cc.gov.pk