CCP conducts inspection of Poultry Association premises

ISLAMABAD (PR/APP) - The Competition Commission of Pakistan (CCP), in pursuance of its powers under Section 34 of the Competition Ordinance, has conducted search and inspection of the offices of the Pakistan Poultry Association in Karachi, Lahore and head office in Islamabad. According to a press release, the CCP took notice of the website of Pakistan Poultry Association where the poultry products prices are determined and displayed on daily basis. Being conscious of the fact that Pakistan Poultry Association as an undertaking is not involved in the production or sale of any poultry products and this display of prices on its website prima facie gives an impression that either prices are decided by the Pakistan Poultry Association or are dictated by other interested persons by utilizing the platform of Pakistan Poultry Association. The display of pricing information the official website of Pakistan Poultry Association prima facie indicates violation of section 4 of the Competition Ordinance, 2010. The officials of the Pakistan Poultry Association present at the zonal offices and head office fully co-operated and provided complete assistance to the officers of CCP in conducting the search and inspection. The inspection teams of CCP have impounded certain documents/files and the computerized information to analyze the same by the Enquiry Officers, so appointed in this regard under the provisions of the Competition Ordinance, 2010. The CCP team headed by Director General Mr. Ikram-ul-haq Qureshi conducted search and inspections of Pakistan Poultry Association in Karachi on 25 May 2010, and the teams in Islamabad and Lahore, headed by Director General Mr. Tariq Bakhtawar and Director Ms. Shaista Bano, conducted the search and inspections on 24 May. Meanwhile, the Competition Commission of Pakistan (CCP) has fixed 7 June 2010 as the date of hearing in the show cause notice issued to a company for allegedly abusing its dominant position. In discharge of its duties, CCP took notice of the letter dated 22 January 2009 of the Consumer Awareness and Welfare Association (CAAWA), wherein it was alleged that the company was abusing its dominant position in Pakistan. CCP conducted a detailed enquiry under Section 37 of the Ordinance by appointing Ikram-Ul-Haque Qureshi, Director General (Legal) and Noman A. Farooqi, Deputy Director (Legal), which was concluded vide enquiry report dated 19 May 2010. Based upon the recommendations of the Enquiry Officers in the Enquiry Report, a show cause notice was issued to the company on 24 May 2010 under Section 30 of the Ordinance for the alleged abuse of its dominant position in the relevant market for the sale and lease of aseptic packaging machines using aseptic cartons, in terms of Section 3 of the Ordinance. It has been alleged in the show cause notice that in terms of the Enquiry Report, prima facie, the company is abusing its dominant position, through the Trade Compliance clause in the 'Equipment Sale Agreement, which is not only unfair in nature but is also in violation of the basic principle 'ignorance of law is no excuse. It is further alleged in the show cause notice that, in terms of the Enquiry Report, the company through its 'Machine Rental Agreement is tying the lease of its Rented Equipment with the machine maintenance/ service agreement, and making it incumbent on its customers i.e. milk/juice processors to enter into a separate service (maintenance) agreement in order to conclude the machine rental agreement. This results in foreclosing the choice of its customers and thereby restricting competition for such services in the relevant market which is prima facie, violative of the provisions of 3(3)(c) & (d) of the Ordinance. It has been further alleged that, in terms of the Enquiry Report, prima facie, the company is tying and imposing on its customers the sale of packaging machine with packaging material (aseptic cartons) in its 'Agreement for the Installation and Commission during Commissioning and Validation period. Prima facie, this tied selling seems to have been imposed on its customers, in violation of Section 3(3) (c) of the Ordinance. In addition to the above, it has also been alleged in the show cause notice that, the company did not provided copies of all the agreements entered inter se the company and its customers i.e. milk/juice processors. Such withholding of information on part of the company, prima facie is in violation of clause (c) of sub-section (1) of Section 38 of the Ordinance. The company has been called upon to show cause in writing on or before 7 June, 2010 and to appear and avail the opportunity of hearing before the Commission on 7 June, 2010 and explain as to why an appropriate order under Section 32 and/or clause (a) of Section 31 of the Ordinance may not be passed and/or penalty for the above mentioned violations be not imposed under Section 38 of the Ordinance.