Ulink Agritech Private Limited and Agro Input Dealers Association, others

Public Version

COMPETITION COMMISSION OF INDIA

Case No. 06 of 2023

In Re: Ulink Agritech Private Limited Office No. 106 (B&C), $6^{\text{th}}$ Floor, Building A-1, E-Space IT Park, S. No. 4/1, Nagar Road, Pune Maharashtra – 411014 Informant

And

Agro Input Dealers Association Shrikrishna Apartments, 39/A, Gultekdi, Opp. Apsara Cinema, Market Yard Road, Pune Maharashtra- 411037 Opposite Party No.1

Agro Input Welfare Association 15 Sardar Patel Market, O/S Jamalpur Gate Paldi, Ahmedabad, Gujarat – 380022 Opposite Party No.2

Mr. Manmohan C. Kalantri Shrikrishna Apartments, 39/A, Gultekdi, Opp. Apsara Cinema, Market Yard Road, Pune Maharashtra- 411037 Opposite Party No.3

Mr. Arvindbhai Jerambhai Patel 15 Sardar Patel Market, O/S Jamalpur Gate Paldi, Ahmedabad, Gujarat – 380022 Opposite Party No.4

CORAM

Ms. Ravneet Kaur Chairperson

Ms. Sweta Kakkad Member

Mr. Deepak Anurag Member

Appearances during the hearings:

Order under Section 27 of the Competition Act, 2002

1. The present Information has been filed by Ulink Agritech Private Limited (“Informant”) alleging contravention of provisions of Section 3(3)(b) of the Competition Act, 2002 (“Act”) by Agro Input Dealers Association (“AIDA”/“OP-1”), Agro Input Welfare Association ( “AIWA”/“OP-2”), Mr. Manmohan C. Kalantri (“President of AIDA”/“OP-3”) and Mr. Arvindbhai Jerambhai Patel (“Secretary of AIDA and Co-ordinator of AIWA”/“OP-4”). (Hereinafter, OP-1, OP-2, OP-3 and OP-4 are collectively referred to as “Opposite Parties”/ “OPs”).

Facts in brief, as stated in the Information

2. The Informant is stated to be an agricultural technology start-up engaged in providing: (i) consultation services to farmers through its call centre, mobile application (“AgroStar”) and network of franchisee stores; and (ii) doorstep access of agricultural inputs to farmers. It is stated that the Informant provides omni-channel services to farmers across five states namely, Gujarat, Maharashtra, Madhya Pradesh, Rajasthan and Uttar Pradesh. Further, the Informant is engaged in the business of marketing and trading of agricultural inputs such as fertilisers, pesticides, nutrients, seeds, sprayers, hardware products and advisory services in relation to agriculture.

3. OP-1 is stated to be a national level organisation of agro-input dealers. OP-2 is a state level organisation of agro-input dealers in Gujarat. It is stated that registered members of OP-1 and OP-2 comprise of seed manufacturers, distributors and retailers. OP-3, is the President of OP-1 and stated to be the Director of Kalantri Beej Bhandar Private Limited and IFFCO eBazar Limited. OP-4 is the Secretary of OP-1 and also the Co-ordinator of OP-2. It is also stated to be the Managing Director of Gujarat Agro Seeds Company.

4. It is stated that products supplied by the Informant are purchased from global/national manufacturers namely, Monsanto, Corteva Agri-Science India Private Limited, UPL Ltd., Syngenta, etc. and from their dealers. Such products are sold by the Informant under the private label of AgroStar as well as on a non-private label basis (i.e., distribution of products as received from manufacturers/ dealers).

5. It is also stated that the Informant has tied up with numerous retail stores i.e., ‘Saathi Stores’ across the five states on a non-exclusive basis. These Saathi Stores are branded as ‘AgroStar ki laaI dukan’ that purchase products (both private label and non-private label products) from the Informant and further supply the same to farmers. As per the Informant, the afore-mentioned arrangement is beneficial for farmers as they are able to directly visit the Saathi Store within their proximity for both personal assistance and direct purchase of agri-products. It also benefits dealers/retailers as the member companies of the OPs refuse to supply products in small quantities as per the requirements of small dealers.

6. It has been alleged that certain trade associations including the OPs have initiated campaigns against the Informant and are threatening Saathi Stores and prospective retail stores, stating that any store having dealership with the Informant shall have to face consequences. The Saathi Store partners have allegedly started severing ties with the Informant under threats of consequences. The OPs, being powerful associations, were threatening various Saathi Store partners to terminate their dealerships and to take down ‘AgroStar’ logo and sign boards from their shops. It has also been alleged that OP-2 had organised a meeting wherein it openly called its members to boycott online companies operating in agri-input market.

7. As per the Informant, the OPs, being powerful trade associations, are using their power to drive the Informant out of the market by forcing agri-input companies to stop supplies to online platforms, stating that it is against the larger interest of farmers. It has been stated that the OPs were circulating a series of false and baseless messages on social media as a part of their campaign. A number of messages showing progress and success of OP-2’s campaign against online platforms bringing out compliance of their instruction by the members have been enclosed along with the Information. It is alleged that the OP-1 and OP-2 were trying to deter its members from buying and selling agri-input products through online platforms, citing legal consequences. Further, there are also messages which have been circulated by the OPs to boycott seed and pesticide companies who refuse the diktat of the OPs and continue to deal with the Informant.

8. It has been stated that the Informant has a valid license to sell agri-input products and has complied with the existing laws in India. The Informant has alleged that the actions taken by the OPs are against the Digital India initiative of the Government and would seriously affect the ease of doing business in India in a negative manner. It has been stated that the Ministry of Agriculture and Farmers Welfare vide its Gazette Notification G.S.R. 846 (E) dated 24.11.2022 (“notification dated 24.11.2022”), published the Insecticides (Second Amendment) Rules, 2022. The amendment added a new Rule 10(E) to the Insecticides Rules, 1971 which permits online sale of insecticides through e-commerce entities. The said Rule 10 (E) reads as follows:

“10(E) Sale of Insecticides through e-commerce entity A licensee, during the currency of license, may undertake sale of any insecticide through e-commerce entity for supply of insecticides to the doorstep of farmers and the licensee shall comply with the provisions of the Act and the rules made thereunder for the time being in force...........”

9. It is alleged that through the action of the OPs, as a cumulative effect, both the chain of procurement of agri-inputs from manufacturer and selling them through retailers are cut for the Informant.

10. In a nutshell, the entire modus operandi of the OPs was to coerce agri-input companies and retailers not to deal with the Informant/online platforms. Accordingly, the Informant has alleged that the illegal and anti-competitive campaign started by the OPs has achieved its purpose as various major agri-input manufacturers have written to the OPs affirming that they will not choose any online e-commerce firms or enter into any dealership agreement with them to sell their products and issued directions to its dealers and distributors to desist from engaging in such acts, citing legal consequences in case of violation.

11. It has been stated that, there exists an understanding between members of the OPs which, through their impugned conduct on the part of the OPs is in violation of Section 3(3)(b) of the Act as they have limited the channel of supply and distribution of agri-inputs by forcing the Informant to limit their reach to farmers. The OPs have also hindered the technical development by not allowing growth of technology based innovative players like that of the Informant in the market.

12. The Informant, inter alia, prayed the Commission, to direct the Director General (“DG”) to investigate the matter against the OPs and all other unidentified parties as found to be indulged in the instant anti-competitive practice and pass an order under Section 27 of the Act, directing the OPs and its members to cease and desist from indulging in anti-competitive activities while imposing penalty for the same.