The Competition Commission of Pakistan (CCP) has issued show cause notices to GM Cables & Pipes (Pvt) Ltd. and Newage Cables (Pvt) Ltd. for their alleged involvement in Resale Price Maintenance (RPM), pursuant to completion of enquiry a potential violation of Section 4 of the Competition Act, 2010.
Resale price maintenance (RPM) is a contract between a manufacturer and its distributors, where the distributors must sell the product at specific prices, and if not maintained, the manufacturer may terminate business, said a press release issued here on Thursday.
This practice hinders competition by restricting dealers’ ability to offer lower prices, ultimately disadvantaging consumers. The CCP initiated an enquiry after taking ‘suo motu’ notice of circulars issued by both companies, which restricted their dealers across various regions from offering discounts beyond a certain percentage on credit and cash sales.
These circulars required dealers to stick to the specified rate limits, prohibiting them from selling below the designated discounts.