Reviewing CCI order, will take appropriate legal recourse: Asian Paints

Business Standard

4 days ago

Asian Paints is reviewing the order passed by fair trade regulator CCI directing a probe against the country's leading paint maker for alleged abuse of its dominant position in the market and said it plans to take appropriate legal recourse.
Asian Paints said it will cooperate with the Competition Commission of India (CCI) in the investigation over allegations of exclusionary practices.
"The company is currently reviewing the order and will take appropriate legal recourse. The company remains committed to fully cooperating with the CCI during the course of the investigation," Asian Paint said in a late night regulatory filing on Thursday.
Earlier this week, CCI ordered an investigation against Asian Paints for allegedly abusing its dominant position in the market for manufacturing and sales of decorative paint over the complaints filed by Aditya Birla group firm Grasim Industries.
Grasim, a new entrant in the domestic paint industry with brand Birla Opus, had accused Asian Paints of engaging in exclusionary practices aimed at stifling its entry and growth in the Indian decorative paint segment.
"The Commission is of the opinion that a prima facie case of contravention of the provisions of section 4(2)(a)(i), 4(2)(c) and 4(2)(d) of the Act by the OP (Asian Paints) is made out in the present matter," CCI said in the order.
Section 4 of the Competition Act, 2002, prohibits abuse of dominant position.
CCI has directed its probe unit Director General for an investigation into the allegations and submit a preliminary report within a period of 90 days.
CCI had observed that Asian Paints, by restraining its dealers from dealing with Grasim's Birla Opus by enforcing exclusivity upon them, which is imposition of unfair conditions upon them, found to be in the nature of exploitative conduct.
The CCI order had also clarified that observations made were not a final view on the case merits and directed the DG to conduct the probe without being swayed in any manner whatsoever by the observations made by it.
In the last 5-6 years, several new players have entered the paint market, including Pidilite with Haisha Paints, Grasim with its Birla Opus, and JSW Paints.
Besides, pipes and fittings manufacturer Astral acquired Gem Paints and JK Cements acquired Acro Paints making its entry into the paint sector.
However, Asian Paints still controls over 50 per cent of the decorative paint market in India, followed by Berger Paints, and Kansai Nerolac. According to reports, these three major players in the Indian paint industry control over three-fourths of the market.
According to an ICICI Direct report, the size of the India Paint and Coatings Market is estimated at $ 9.60 billion in 2024. It is expected to reach $ 15.04 billion by 2029, growing at a CAGR of 9.38 per cent between 2024 and 2029.