The Competition Commission of Pakistan (CCP) has fined United Distributors Pakistan Limited (UDPL) and International Brands (Private) Limited (IBL) a combined Rs. 42 million for implementing a three‑year non‑compete agreement in breach of Section 4 of the Competition Act, 2010.
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According to the CCP’s detailed order, UDPL agreed to withdraw from the human pharmaceuticals distribution market for three years, in return for a Rs. 1.131 billion payment from IBL. Although UDPL disclosed the arrangement to the Pakistan Stock Exchange (PSX), it failed to secure prior CCP approval.
“The agreement erected a protective barrier around IBL’s operations, blocking market entry and undermining competition,” the Commission observed, noting that the hefty compensation was explicitly tied to UDPL’s market abstention.
Despite a contractual clause promising to seek a regulatory exemption, neither party applied to the CCP until after show‑cause notices were issued in June 2024—an after‑the‑fact request the Commission deemed insufficient to cure the illegality.
- Penalties Imposed:
- UDPL: Rs. 21 million (Rs. 20 million for Sections 4(1) & 4(2)(b) + Rs. 1 million under Section 38 for unauthorized PSX disclosures)
- IBL: Rs. 20 million (Sections 4(1) & 4(2)(b))
The CCP has ordered both companies to file a compliance report within 30 days and warned of additional daily fines for any ongoing breaches. It has also referred the case to the Securities and Exchange Commission of Pakistan and the PSX for any further action under their mandates.
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