CCP issues show-cause notices to sugar mills for cartelization

November 28, 2025 (MLN):  The Competition Commission of Pakistan (CCP) has issued show-cause notices to ten sugar mills in Punjab for allegedly forming a cartel to delay the crushing season and fix the sugarcane procurement price at Rs400 per maund.

CCP observed that representatives of the ten mills held a meeting on November 10 at Fatima Sugar Mills, where they collectively decided to begin crushing from November 28.

The mills also agreed to fix the sugarcane purchase price at Rs400 per 40 kilograms. The meeting was chaired by Rana Jameel Ahmed Shahid, Resident Director of Fatima Sugar Mills, according to a press release issued.

Representatives from Sheikhhoo Sugar Mills, Thal Industries Corporation, Tandlianwala Sugar Mills (Rehman Hajra Unit), JK One Sugar Mills, Ashraf Sugar Mills, and Kashmir Sugar Mills attended the meeting in person, while Siraj Sugar Mills, Two Star Sugar Mills, and Haq Bahu Sugar Mills joined online.

The CCP noted that price-fixing and joint decision-making of this nature violate Section 4 of the Competition Act, 2010.

It also highlighted that the Punjab Sugarcane Commissioner had directed sugar mills to begin crushing from November 15, a directive disregarded by the mills’ collective decision.

There is a clear imbalance of bargaining power between sugar mill owners and farmers. Ideally, each mill should negotiate cane prices directly with farmers’ representatives in its area, considering supply and demand conditions.

However, instead of allowing the market to function naturally, the mills allegedly set a unilateral price of Rs400 per 40 kg through collective collusion.

Based on the evidence, the CCP has directed the mills to submit a written response within 14 days explaining why legal action should not be taken against them for engaging in prohibited agreements, distorting the sugarcane market, and gaining unfair commercial advantage by delaying crushing operations.

The CCP warned that delays in the early crushing season could disrupt sugar supply, potentially leading to artificial shortages and increases in retail sugar prices.

CCP Chairman Dr. Kabir Ahmed Sidhu cautioned all business associations that their platforms must not be used for cartelization or collective business decisions. He warned that strict action would be taken against any trade association involved in anti-competitive practices.

Copyright Mettis Link News