SUMMARY OF THE ARTICLE REINING IN CARTELS BY DILAWAR HUSSAIN

The article alerts us of the use of Cartels in the cement industry which Cartel is an agreement among willing competing firms. Cartel members may agree on such matters as price fixing, total industry output, allocation of customers, allocation of territories, and the division of profits or combination of these, rather than taking such decisions competitively. The aim of such collusion is to increase individual members' profits by reducing competition. Cartelisation is the most offensive anti-competitive practices, and prosecuting it is the most difficult task. The evidence for such an agreement is difficult to find due to lack of documentation. On 16th January, 2012 the government suspected a similar case taking place in the cement industry. In such a situation Competition Commission of Pakistan puts heavy fine on the industry. But history tells us that the All Pakistan Cement Manufacturers Association and its members are unlikely to give the fine. As even before they had gotten away without paying anything by challenging the CCP verdict in court. The article sheds light on the dispute related to cartels between the cement industry, which are globally known to be likely to indulge in cartel and CCP regarding the issue of violation of the Sec 4 Competition Ordinance, 2007 which talks about Cartelisation. The APCMA believes that the raid on 16 was not justified, as they had nothing to hide or conceal. APCMA also said that they had requested the government and taken up the matters to the FBR, to either waive the excise duty on cement, which serves as a incentive to steal for the corrupt members or bring it under supervised clearance and also monitor the cement bags destined for Afghanistan, so that they are not sold to the local markets as that will lead to unfair competition. To avoid this, the association had started Supervised clearance or selfmonitoring movement by putting a representative in each factory. The CCP is of the opinion the APCMA has no right to start any such movement as mentioned before. CCP chairperson says that on 16 January they had conducted a search and inspection exercise with the partys permission to check whether the cement industry is using cartels in the name of the movement. The chairperson had criticized the industry for maintaining peak prices nearly Rs. 425 per bag (25% increase from last year) on the grounds on energy crises, while 80% of the industry ran on coal, whose prices were low internationally. The prices were further increased by Rs. 5 after the 16 January event. CCP will still be checking for evidence to see whether or not the association is involved in controlling the cement supply and prices.
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