Action against sugar producers: ECC not backing Competition Commission

ISLAMABAD: Despite facing a major sugar crisis, the Economic Coordination Committee (ECC) of the Cabinet on Tuesday deferred consideration of a Competition Commission of Pakistan (CCP) report seeking government support in proceeding against alleged wrongdoings by sugar producers.

According to the report available to Daily Times, the CCP had observed that the sugar mills represented a powerful political lobby and initiating proceedings against them would require full government support.

According to the report, the CCP sought government backing and assistance in carrying out a detailed competition assessment of the sugar industry so that malpractices, if any, could be identified and addressed. The ECC had earlier requested the CCP to investigate cartelisation by sugar manufacturers. In keeping with the instructions, CCP prepared a detailed analysis of the performance of the sugar industry, including the fixing of sugar prices among other issues.

The CCP, in the past, has not been able to prove the existence of a cartel among sugar producers, despite the fact that the activities of the Pakistan Sugar Mills Association have always aroused suspicion. In recent years, sugar prices have become a contentious public policy issue. The sugar sector constitutes 4.2 percent of the country’s manufacturing industry, producing around 3.542 million metric tonnes of sugar in 2008-09. Although similar in size to the cement-manufacturing industry, sugar’s many backward (sugarcane growers) and forward (food processing) linkages within the economy indicate that its indirect socio-economic impact in overall terms is significantly larger than its direct contribution to the GDP.

source: dailytimes