Case No. 43 of 2019
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COMPETITION COMMISSION OF INDIA
Case No. 43 of 2019
In re:
XYZ (Confidential) Informant
And
Maharashtra Wine Merchants Association Opposite Party 1
306, Allied Industrial Estate
3rd Floor, Prof. Ram Panjwani Marg
Mahim (W), Mumbai-400016
Pune District Wine Merchants Association Opposite Party 2
F-27, 2nd Floor, Shanti Kunj, Opposite GPO
Pune-411001
Association of Progressive Liquor Vendors Opposite Party 3
5, Dhanlaxmi CHS Ltd.
Mahakali Caves Road, Andheri East
Mumbai-400093
Pimpri Chinchwad Liquor Dealers Association Opposite Party 4
Shop No. 3, Sai Park Apartment
Near Shastri Park, Pimpri, Pune 411017
Case No. 43 of 2019
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CORAM
Ravneet Kaur
Chairperson
Anil Agrawal
Member
Sweta Kakkad
Member
Deepak Anurag
Member
Appearances:
For Informant
: None
For Opposite Party No. 1, Mr. Dilip Jamnadas
Giyanani,
President
Caretaking
Committee
Opposite Party No. 1, Mr. Balvinder Singh Rekhi,
President, Opposite Party No. 1 and Mr. Dayal
Idnani, Office Bearer, Opposite Party No. 1
: Mr. Anandh Venkataramani and
Ms. Anjali Agrawal, Advocates
For Opposite Party No. 2 and Mr. Ajay V
Deshmukh, Secretary, Opposite Party No. 2
: Ms. Gauri Puri, Advocate
For Opposite Party No. 3, Mr. Arvind Miskin,
President, Opposite Party No. 3 and Mr. Sumit
Chawla, Vice President, Opposite Party No. 3
: Mr. Manu Chaturvedi, Advocate
Case No. 43 of 2019
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Order under Section 27 of the Competition Act, 2002
1.
The present Information has been filed by the Informant (who has requested
confidentiality over his identity) under Section 19(1)(a) of the Competition Act, 2002
(the ‘Act’) against Maharashtra Wine Merchants Association (‘Opposite Party No. 1’ /
‘OP-1’); Pune District Wine Merchants Association (‘Opposite Party No. 2’ / ‘OP-2’);
Association of Progressive Liquor Vendors (‘Opposite Party No. 3’ / ‘OP-3’); and
Pimpri Chinchwad Liquor Dealers Association (‘Opposite Party No. 4’ / ‘OP-4’) ,
alleging, inter alia, contravention of the provisions of Sections 3 & 4 of the Act.
2.
As per the averments made in the Information, the Informant is a company engaged in
the business of manufacturing, distribution and sale of alcoholic beverages (‘Alcobev
Companies’). OPs are associations of licensed retail liquor vendors or wine shop
owners. The Informant alleged that since 2014, the OPs have been operating as a cartel,
by collectively stipulating that the companies engaged in the manufacture, distribution
or sale of alcoholic beverages must adhere to terms such as in relation to retail margins,
new product launching schemes, transport delivery terms, cash discount rates, credit
period, mandatory launching fees, donations etc. The Informant has stated that such
unfair and unilateral terms stipulated by the OPs are in contravention of the provisions
of Section 3(3) and Section 4(2) of the Act.
3.
Further, the Informant has alleged that the OPs have devised a practice under which,
whenever a new product is launched by an Alcobev Company, the latter is forced to
approach the OPs and the OPs then take a unilateral decision on the selling terms and
prices. Thus, the Alcobev Companies are forced to sell their products at a particular price
and fixed retails margins to all members of the OPs. Additionally, Alcobev Companies
are also charged a mandatory ‘launching fee’ for their new product. The Informant has
averred that if any Alcobev Company tries to circumvent the OPs and approach retail
vendors (who are members of the OPs), then the OPs ensure that such company’s new
product is boycotted.
Case No. 43 of 2019
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Directions to the Director General (DG)
4.
After considering the Information, and other material on record, the Commission, vide
order dated 21.01.2020 passed under Section 26(1) of the Act, formed an opinion that a
prima facie case of violation of section 3(1) read with Section 3(3)(a) of the Act for
imposing unfair conditions, fixing prices and restricting market access is made out and
directed the Director General (‘DG’) to cause an investigation into the matter and submit
a report within a stipulated time period. Pertaining to the violation of section 4 of the Act,
however, the Commission noted that the allegation of abuse of dominance collectively
by all the OPs does not warrant any examination under Section 4 as the present statutory
scheme does not provide for joint or collective dominance.
Investigation by the Director General
5.
To examine the allegations, the DG issued notices to the OPs and third parties to collect
relevant information/ data. DG also recorded statements of the office bearer of the OP
and third-party witnesses during the investigation. The Investigation Report was
prepared on the basis of such documentary evidence, duly corroborated by the oral
testimony of the witnesses.
6.
The Investigation Report was submitted by the DG on 29. 07. 2022, in confidential
and nonconfidential versions, along with case record. In the Investigation Report,
the DG, inter alia, concluded as under:
6.1 OP-1, OP-2 and OP-3 (collectively referred as ‘the OPs’) were found to be
engaging in anti-competitive conduct by issuing circulars to their members
prescribing uniform terms relating to discount, payment conditions and
transportation charges. Such concerted determination of commercial terms
amounted to price fixing within the meaning of Section 3(3)(a) read with Section
3(1) of the Act.
6.2 By forcing the Alcobev Companies to get NOC from it for the introduction of
new products which are in nature of approvals for the launch of the new products
in the market OP-1, OP-2 and OP-3 are also in violation of the provisions of
Section 3(3)(b) of the Act.
6.3 OP-4 was found to be defunct, and therefore no conclusive findings could be
drawn against it.
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6.4 Six office bearers of OP-1 to OP-3 — Mr. Dilip Jamnadas Giyanani, President –
Caretaking Committee (OP-1); Mr. Balvinder Singh Rekhi, President, (OP-1);
Mr. Dayal Idnani, Office Bearer, (OP-1); Mr. Ajay V. Deshmukh, Secretary, (OP-
2); Mr. Arvind Miskin, President, (OP-3); and Mr. Sumit Chawla, Vice President,
(OP-3).) — being in charge of and responsible for the conduct of the respective
associations, were held liable under Section 48 of the Act.
7. The Commission considered the Investigation Report of the DG in its ordinary meeting
held on 10.08.2022 and directed to forward an electronic copy thereof (non-confidential
version) to the Informant, OP-1, OP-2, OP-3 and their respective individuals identified
under section 48 of the Act (collectively referred as ‘Parties’) for filing their respective
objections/ suggestions, if any to the Investigation Report.
8.
OP-1’s individuals and OP-2 sought an 8-week extension to file their replies and
financials, while OP-3 filed three separate applications requesting inter alia legible
copies of certain documents of Investigation Report and its annexures, the creation of a
confidentiality ring to access the non-redacted record, and permission to cross-examine
a third-party witness,
and the Informant. The
Commission, vide order dated 30.09.2022, allowed OP-1 and OP-2 to file their
objections/suggestions by 20.11.2022, directed the DG to provide legible copies of the
documents as sought by OP-3, and permitted the cross-examination only of the third-
party witness, noting that no oral testimony of the Informant was recorded. The DG
completed the cross-examination on 13.10.2022 and submitted the report on 02.11.2022.
9.
Counsels for OP-1 and OP-2 sought a final extension of ten days to file their replies to
the Investigation Report. The Commission, vide order dated 28.11.2022, allowed OP-1
and OP-2 to submit their replies by 30.11.2022. Subsequently, OP-1, OP-2, and their
respective individuals filed their replies and financial statements on 09.12.2022 and
05.12.2022, respectively.
10.
OP-3, vide application dated 08.12.2022, sought an appropriate version of the report on
cross-examination and requested an extension of four weeks to file its
objections/suggestions to the Investigation Report from the date of receipt of the said
