ISLAMABAD: The Competition Commission of Pakistan (CCP) during an inquiry in the tractor industry has found two major tractor manufacturing firms involved in cartelization.
According to sources, the commission has concluded an enquiry under Section 37(1) of the Competition Act, 2010 (the ‘Act’) in the Tractor Industry. The Commission’s enquiry report has found that two leading Tractor Manufacturers, Millat Tractors Ltd (MTL) and Al-Ghazi Tractors Ltd (AGTL), are prima facie abusing their dominant position in violation of Section 3 of the Act and have entered into prohibited agreement (Cartelization) in violation of Section 4 of the Act.
As per the sources, the CCP had initiated the enquiry on its own, however, Commission received various concerns forwarded to it from Pakistan Citizen Portal (PCP) for drastic increase in the prices of tractors manufacturing companies at different points in time despite various incentives given by the government and a great extent of localization in the tractor industry. The complainants also highlighted the alleged substandard build quality of the tractors resulting in frequent breakdown.
As per the Commission’s report the enquiry committee during the course of enquiry sought information relating to production and price data from MTL and AGTL for the period three years. The data shows that both the tractor manufacturers increased their prices in a sequential manner during a smaller time frame and the quantum of percentage increase was approximately similar in case of alternative products i.e. tractors.