Dairy Price-Fixing Penalties Reduced by Tribunal

The Competition Appellate Tribunal (CAT) has upheld a ruling against three Karachi-based dairy farmer associations for colluding to fix milk prices, while granting partial relief by reducing penalties for their senior representatives.

In its latest decision, the Tribunal ordered the associations’ leaders to submit written assurances committing not to engage in future price coordination. The penalties for Shakir Umer Gujjar, President of the Dairy and Cattle Farmers Association (DCFA), and Haji Sikandar Nagori of the Karachi Dairy Farmers Association (KDFA), were reduced from PKR 1 million and PKR 500,000 respectively, to PKR 150,000 each, following a request from the appellants.

The Competition Commission of Pakistan (CCP) initiated the investigation after media coverage of a steep rise in milk prices in Karachi. Its inquiry concluded that the associations had played a direct role in orchestrating price increases across all levels of the dairy supply chain—bandhi, mandi, wholesale, and retail—using coercive methods, including threats to suspend milk supply.

Video footage obtained during the probe showed Gujjar publicly announcing a price hike to fellow dairy farmers. Additional evidence confirmed the new prices were implemented throughout the city.

The CCP’s findings also revealed that milk had been stockpiled in ice factories to fabricate a shortage, before being sold at elevated prices in rural areas of Sindh. This manipulation disrupted distribution and increased costs for consumers.

The CCP reiterated its warning to trade groups nationwide to prevent their forums from becoming channels for sharing sensitive commercial information or engaging in conduct that distorts market competition.