CCI orders probe against Asian Paints for alleged abuse of dominance following complaint by Grasim's Birla Opus Paints
The Competition Commission of India (CCI) has directed its director general (DG) to initiate an investigation against Asian Paints for alleged abuse of market dominance. The probe follows a complaint filed by Grasim Industries, which recently entered the paint market under the Birla Opus Paints brand.
According to CCI's order dated July 1, Birla Opus Paints has accused Asian Paints of placing restrictive clauses in distributor agreements to discourage them from selling Birla Paints products. The complaint also alleges that Asian Paints rewarded exclusive dealers with special discounts and foreign trips, while penalizing those who sold both brands by reducing credit limits, increasing sales targets, and cutting down consumer leads.
The commission noted that Asian Paints allegedly threatened raw material suppliers, transporters, and warehousing agents to limit business with Birla Paints. A specific incident was cited from October 2023, when Asian Paints, during a vendor meet at ITC Maratha Mumbai, reportedly warned over 150 top vendors that supplying to Birla Paints would result in a reduced business share with Asian Paints and that vendors should charge higher rates to Birla Paints.
CCI observed that such conduct prima facie amounts to input foreclosure and denial of market access, which violates Section 4(2)(c) of the Competition Act.
According to CMIE data, Asian Paints holds the largest market share in the Indian paints sector at 39.05% as of FY23, followed by Berger Paints with 12.13%, while Kansai Nerolac and Akzo Nobel India each hold under 10%.
The commission has now ordered a detailed investigation into the matter.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information.
Ahmedabad Plane Crash
Aditya Bhagchandani serves as the Senior Editor and Writer at Business Upturn, where he leads coverage across the Business, Finance, Corporate, and Stock Market segments. With a keen eye for detail and a commitment to journalistic integrity, he not only contributes insightful articles but also oversees editorial direction for the reporting team.
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