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CCP Inquiry Discloses Cartelization in Dairy Sector

Islamabad: The Competition Commission of Pakistan (CCP) has concluded an investigation into cartelization and price-fixing of milk in Karachi, the country’s most populous city.

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The CCP launched the investigation after taking note of media reports and concerns voiced by a consumer association regarding the increase in milk prices in Karachi and its surrounding areas by farm, wholesale, and retail dairy associations.

According to official data, the failure to adhere to the declared prices is mostly attributable to the activity of numerous associations in the milk supply chain.

Officials estimate that milk vendors collected more than Rs 47 billion from consumers in Karachi and its environs in a single year. In contrast, the market was distorted since there was no price competition, and consumers were forced to pay unreasonable prices regardless of the quality of the milk.

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A city-by-city study of Karachi, Lahore, and Islamabad-Rawalpindi reveals that only Karachi has a uniform milk price, whereas all other cities have variable pricing. Such pricing homogeneity is also indicative of price fixing by the various dairy associations.

Therefore, these decisions to set the bandhi rate on the relevant market violate Section 4 of the Competition Act of 2010 prima facie.

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