The Competition Commission of Pakistan (CCP) has started a hearing in a pricing collusion case involving the Fertilizer Manufacturers of Pakistan Advisory Council (FMPAC), CCP announced in a statement.
According to the statement, the hearing was initiated after show-cause notices were issued to FMPAC and its six leading fertilizer manufacturing companies for prima facie violations of Section 4 of the 2010 Competition Act stemming from an advertisement issued by FMPAC on Nov. 21, 2021, on behalf of its members, announcing a “Maximum Retail Price (MRP) of Urea” during a period of rising urea prices and reported shortages.
The CCP said it “noted a pattern of uniform pricing and price parallelism among fertilizer manufacturers in various districts, irrespective of size and market share of manufacturers, suggesting potential collusive activity.”
The inquiry further noted that “despite having different costing structures owing to varying rates of feedstock or fuelstock input gas, which is the major component in manufacturing, the MRP of all players remained fixed.”
“From a competition law perspective, the announcement of prices by an association is considered a commercial decision beyond permissible activities,” CCP said. “CCP has repeatedly directed business associations to refrain from engaging in price fixing or other collusive practices.”