CCI, Retail News, ET Retail

India’s Competition Commission said Grasim Industries had abused its dominant position in the supply of a certain staple fiber by charging discriminatory prices to its customers, denying them market access and imposing additional obligations on them. . The commission ordered the company to cease and desist from engaging in such practices, which were found to violate the provisions of the Competition Act, pursuant to an order dated August 6.

The ICC said the company had “abused its dominant position in the relevant market of the” market for the supply of viscose fibers to spinners in India “by charging discriminatory prices to its customers, denying market access and by imposing additional obligations on its customers “.

In a regulatory filing dated August 9, Grasim Industries said that “although the company has not yet received a certified copy of said order, it believes it has sufficient grounds to appeal.”

The regulator has not imposed any financial penalties on the company, given that it has already been fined Rs 301.61 crore through an order issued in March 2020 for substantially similar behavior.

In addition, the contravention period in this case (2017-18) was a continuation of the contravention period in the previous case (2012-2017) and therefore partially overlapped.

The Committee noted that Grasim Industries is the sole producer of viscose staple fibers (VSF) in the country and enjoys a dominant position in the relevant market for its supply to spinners in India. The only other source of viscose fibers for the country’s spinners was import, which is not an economically viable alternative.

The relevant market considered by the ICC was “the market for the supply of viscose fibers to spinners in India”.

The fair trade regulator noted that the conduct of Grasim Industries in seeking details of viscose fibers consumed from domestic spinners to offer discounts is nothing more than an attempt by a dominant company to control the whole market in its favor by setting conditions, which not only impose obligations on small players but also hinder their freedom of trade.

“The Commission is convinced that by requiring spinners to submit production details, OP has asserted its market power over small players and acted in an abusive manner,” he said.

In the case of one of the informants, Grasim Industries withdrew all discounts / credit notes, which made the supply of viscose fibers expensive for them, which made the viscose fiber yarn that it manufactures. uncompetitive, the regulator noted.

The order came after three informants brought various allegations against the company regarding the company’s abuse of dominant position. The commission instructed the Director General (DG) to investigate the case and submit a report.