BACKGROUND:

Murree Brewery Company Limited filed a complaint with the erstwhile Monopoly Control Authority (MCA) vide it letters dated 8th and 20th August 2007 that fast food restaurants, namely, McDonalds, Pizza Hut and Kentucky Fried Chicken (KFC) had refused to entertain its offer to sell non-alcoholic beverages, i.e., Malt 79, Cindy, Lemon Malt, Original Lemonade and Big Apple, as all of them have exclusive arrangements with either Coca-Cola or Pepsi Cola. The facts as stated in the complaint, prima facie, seemed to violate Section 3 read with Section 6 of the Monopolies and Restrictive Trade Practices Ordinance, 1970. Section 3 of the MRTPO prohibited “undue concentration of economic power, unreasonable monopoly power or unreasonably restrictive trade practices”, whilst Section 6 provided instances of practices which were deemed to be “unreasonably restrictive trade practices.

For its analysis and decision, the relevant product market was defined as foreign fast food restaurants and the geographic market was the whole of Pakistan. The Commission found that the practice of SIZA to acquire products only from the Coca-Cola Company amounted to exclusive dealing whereby a manufacturer and buyer were in an arrangement forbidding the buyer from purchasing contracted goods from any other seller which were in the nature of “vertical restraints”. However, the Commission looked at the horizontal effects of this arrangement whereby the competitors of the Coca-Cola Company did not have access to a dominant player/buyer which was held to attract the provisions of Section 3.

ORDER:

The matter was disposed of vide Order dated 24-04-2009 with a view to increase the products available at SIZA locations through commitments/undertakings given by SIZA. Based on the undertakings given by SIZA and GAM, and on the fact that the Complainant is satisfied that SIZA will give due consideration to its products, Show Cause Notice No. 03/2008-09 dated 24th November 2008 issued to SIZA Foods (Pvt) Limited was disposed.

•The action was initiated under the provisions of Monopolies and Restrictive Trade Practices (Control & Prevention) Ordinance, 1970 (MRTPO, 1970) by the defunct Monopoly Control Authority (MCA). However when the MRTPO, 1970 was repealed the order was passed by the Competition Commission Of Pakistan as the successor MCA under Section 59 of the Competition Ordinance, 2007.

CURRENT STATUS:

Compliance by the Undertaking