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Proceedings initiated against Tetra Pak Pakistan Ltd.

ISLAMABAD, May 27 -- The inquiry, under Section 30 of the Competition Ordinance, against Tertra Pak Ltd. was concluded and proceedings were initiated on Wednesday, 26 May 2010. The Competition Commission of Pakistan (CCP) has fixed 7 June 2010 as the date of hearing in the show cause notice issued to M/s Tetra Pak Pakistan Limited (the 'Tetra Pak') for allegedly abusing its dominant position in Pakistan.

In discharge of its duties, CCP took notice of the letter dated 22 January 2009 by Consumer Awareness and Welfare Association (CAAWA) wherein it was alleged that M/s Tetra Pak Pakistan Limited was abusing its dominant position in Pakistan.

CCP conducted a detailed inquiry under Section 37 of the Ordinance by appointing, CCP Director General (Legal), Ikram Ul Haque Qureshi, and CCP Deputy Director (Legal), Noman A. Farooqi. Based upon the recommendations of the inquiry officers, a show cause notice was issued to Tetra Pak on 24 May 2010 under Section 30 of the Ordinance for the alleged abuse of its dominant position in the relevant market for the sale and lease of aseptic packaging machines and aseptic cartons, in violation of Section 3 of the ordinance.

It has been alleged in the show cause notice that, in terms of the Inquiry Report, Tetra Pak is abusing its dominant position, through the Trade Compliance clause in the 'Equipment Sale Agreement', which is not only unfair in nature but is also in violation of the basic principle 'ignorance of law is no excuse'.

It is further alleged in the show cause notice that, in terms of the Inquiry Report, Tetra Pak, through its 'Machine Rental Agreement', is tying the lease of its rented equipment with the machine maintenance/service agreement, and making it incumbent on its customers i.e. milk/juice processors to enter into a separate service (maintenance) agreement in order to conclude the machine rental agreement. This results in foreclosing the choice of its customers and thereby restricting competition for such services in the relevant market which is in violation of the provisions of 3(3)(c) & (d) of the Ordinance.

Furthermore, Tetra Pak was found imposing on its customers the sale of packaging material (aseptic cartons) along with the packaging machine by its 'Agreement for the Installation and Commission'. This tied selling seems to have been enforced on its customers, in violation of Section 3(3) (c) of the Ordinance.

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Publication:Daily Times (Lahore, Pakistan)
Date:May 27, 2010
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