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The Competition Commission of Pakistan (CCP) has ordered a punishment of Rs44bn (approximately USD265m) on the Pakistan Sugar Mills Association (PSMA) and 55 sugar mills for systematic manipulation to control the production and supply of sugar. The CCP has held a total of 81 sugar mills guilty of cartelization.
The ruling issued by the chairman and three members states that sugar mills owners have manipulated the production, storage, export and local supply of sugar. They also affected the bidding procedures at the Utility Stores Corporation when it bought sugar from mills.
The CCP started an investigation in December 2019 after allegations of cartelization had surfaced. It had issued show-cause letters to 84 sugar mills associated with the PSMA, the ruling states.
At least 4 sugar mills are to pay Rs70 million apiece, while 22 mills will pay Rs50 million each. It adds up to Rs44bn.
The 26 mills were fined 10 percent of their turnover. The penalties for other mills engaged in manipulation would be issued later after assessing their turnover, the ruling states.
It is anticipated that the total fine would be as high as Rs60bn. This would be the highest punishment levied on any industry in Pakistan.
The CCP claimed that sugar mill owners in Sindh, Punjab, and KPK had established cartels to hike up sugar prices. Their actions caused enormous losses to not only the government but also individuals.