ISLAMABAD: The Competition Appellate Tribunal (CAT) has directed representatives of all three dairy farmer associations in Karachi to submit written undertakings pledging not to engage in milk price fixing in future.

In December 2024, the Competition Commission of Pakistan (CCP) had imposed penalties on the three Karachi-based dairy associations for colluding to manipulate fresh milk prices against the provisions of the Competition Act 2010 and imposed a Rs1 million fine on the Dairy and Cattle Farmers Association (DCFA) and Rs500,000 each on the Dairy Farmer Association Karachi (DFAK) and the Karachi Dairy Farmers Association (KDFA).

The associations moved the appellate forum and on their request the tribunal reduced the penalties imposed on them.

The penalties imposed on Shakir Umer Gujjar, president of the DCFA, and Haji Sikandar Nagori of the KDFA were reduced from Rs1 million and Rs500,000, to Rs150,000 each.

The CCP had launched an inquiry after some media reports highlighted a sharp surge in milk prices in Karachi.

Its investigation found that the associations were directly involved in raising prices at the bandhi (future trading), mandi (auction), wholesale and retail levels. The associations used pressure tactics, including threats to halt milk supply, to enforce price hikes.

The CCP obtained a video showing Shakir Gujjar addressing a gathering of dairy farmers to announce an increase in milk prices in Karachi. Additionally, the commission secured further evidence confirming that the announced prices were implemented across the city.

The probe also revealed that milk was hoarded in ice factories to create artificial shortages, and later sold at inflated prices in rural Sindh. These actions disrupted the supply chain and burdened consumers, it observed.

The CCP reiterates that business associations across the country must ensure their platforms are not used to share commercially-sensitive information or facilitate anti-competitive conduct.

Talking to Dawn, Mr Gujjar confirmed that the tribunal had reduced the penalties and asked the association to file written guarantees.

When asked whether the associations would provide an undertaking to not manipulate milk prices, he evaded a direct replay and said that he was considering challenging the verdict of the appellate tribunal before the high court.

Published in Dawn, May 7th, 2025