The Competition Commission of Pakistan (CCP) has imposed fines of Rs 2 million on three dairy associations in Karachi for increasing the prices of fresh milk.
According to the media reports, a bench comprising Chairman CCP, Dr. Akbar Sidhu and member Abdul Rashid Sheikh issued an order imposing a fine of Rs 1 million on the Dairy and Cattle Farmers Association, and Rs 500,000 each on the Dairy Farmer Association Karachi and the Karachi Dairy Farmers Association.
It is worth mentioning here that the CCP took notice of media reports and conducted an inquiry into the significant increase in milk prices across Karachi.
The investigation revealed that the three associations representing dairy farmers in Karachi were directly responsible for the increase in milk prices in Karachi and its suburbs.
During the operation, the representatives of the associations took the stand that the prices fixed by Karachi Commissioner under the Sindh Essential Commodities Price Control and Prevention of Profiteering and Hoarding Act, 2005, had not been revised for the last three years despite inflation.
However, according to the commission’s report, all the aforementioned associations had increased milk prices by putting unnecessary pressure and obstruction on the milk delivery system.
The CCP announcement stated that the evidence presented before the bench, including video recordings, proved that the prices announced by the associations were practically implemented throughout the supply chain.
These associations forced wholesalers and retailers to adhere to their fixed prices through intimidation and threats of suspension of milk supply.
According to the CCP, the associations exercised significant influence over the key price-setting factors – fixed rates, mandi rates, wholesale and retail prices, which led to distortions in the fresh milk market.
The order further revealed that the dairy farmers’ associations stored milk in ice factories to create artificial shortages, and later sold it at inflated prices in interior areas of Sindh.
According to the statement, these tactics severely affected the supply chain and imposed additional financial burdens on consumers.
Source: Dawn News
