Islamabad: Supreme Court (SC) has declared collective price setting of ghee and oil illegal.

The court upheld the Competition Commission of Pakistan's (CCP) finding that the Pakistan Vanaspati Manufacturers Association (PVMA) violated Section 4 of the Competition Act, 2010 by collectively fixing prices of ghee and cooking oil, and directed the association to deposit a penalty of Rs30 million.

.

A two members bench of SC comprising Justice Jamal Khan Mandokhail and Justice Salahuddin Panhwar endorsed stance of CCP and Competition Appellate Tribunal and declared collective fixation of prices of ghee and cooking oil violation of section 4 of Competition Act.

SC said in its decision that competing businesses will have to determine their prices on their own independently. Determination of collective prices through trade association restricts competition. If the price is low even then determining the prices together by competitive trade organizations is not just.

Low price is beneficial to the consumers but collective fixation of price is violation of competition.

The court maintained that determining collective prices cannot replace free competitive prices. CCP should have been approached on the matter of prices.

Consultation with PVMA on the matter of prices after bypassing CCP led to violation of competition act.