United Distributors Pakistan Ltd (UDPL) and International Brands Ltd (IBL) are considering legal options after the Competition Commission of Pakistan (CCP) imposed a Rs42 million penalty. The fine was linked to a non-compete agreement between the two firms, which the CCP declared anti-competitive and illegal under Section 4 of the Competition Act, 2010.
The CCP said the agreement restricted market access and harmed fair competition in the pharmaceutical and agrochemical sectors. UDPL and IBL were fined Rs20 million each for entering into this market-sharing deal. An additional Rs1 million fine was slapped on UDPL for disclosing the agreement to the stock exchange without prior regulatory approval.
UDPL, a major player in pesticides and fertilizers, claimed it had made multiple disclosures regarding the agreement, including one in May 2024. However, due to internal delays, both companies failed to submit a timely exemption request to the CCP, which led to formal action and show-cause notices.
The companies have since submitted the exemption request, which remains under review. UDPL explained that the CCP’s knowledge of the deal came from its own transparent disclosures, not from any external investigation. It insists there was no intention to bypass legal procedures.
Both firms are now evaluating the CCP’s July 2 order and seeking legal advice. They believe they acted in good faith and maintain that the agreement’s implementation was contingent on regulatory approval. They argue that valid grounds exist to challenge the ruling and clear their stance