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CCI imposes ₹302-cr penalty on Grasim Industries
17 Mar '20
2 min read
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The Competition Commission of India (CCI) yesterday slapped a penalty of ₹302 crore on Grasim Industries for abusing its dominant position with respect to supply of viscose staple fibre (VSF) to spinners. It asked the firm to ‘cease and desist’ from indulging in anti-competitive practices and put in place a transparent ‘discount policy’ for all market participants.
The 60-page order said the company has charged discriminatory prices to its customers and imposed supplementary obligations upon them, which violate competition norms.
"While the company is yet to receive the order of the CCI, it believes that on merits it has sufficient grounds for an appeal," the company said in a filing to the stock exchanges on March 16.
The CCI has directed the company to "refrain from adopting unfair/discriminatory pricing practices and also refrain from seeking the consumption details of VSF from the buyers".
"It is made clear that OP-2 (Grasim Industries) shall not place any end-use restriction on the buyers of VSF and it would be open to them to use the same for spinning or trading or any other purpose, as permissible under law," the order said.
The penalty of ₹301.61 crore is equivalent to 5 per cent of its average turnover from the relevant market from 2014-15 to 2016-17.
A complaint alleging unfair business practices was filed against the Association of Man-Made Fibre Industry of India, Grasim Industries, Thai Rayon and Indo Bharat Rayon. The three companies are part of the Aditya Birla Group.
According to the Commission, Grasim Industries imposed supplementary obligations upon the spinners which by their very nature or according to commercial usage, have no connection with the subject of such contracts.
The 60-page order said the company has charged discriminatory prices to its customers and imposed supplementary obligations upon them, which violate competition norms.
"While the company is yet to receive the order of the CCI, it believes that on merits it has sufficient grounds for an appeal," the company said in a filing to the stock exchanges on March 16.
The CCI has directed the company to "refrain from adopting unfair/discriminatory pricing practices and also refrain from seeking the consumption details of VSF from the buyers".
"It is made clear that OP-2 (Grasim Industries) shall not place any end-use restriction on the buyers of VSF and it would be open to them to use the same for spinning or trading or any other purpose, as permissible under law," the order said.
The penalty of ₹301.61 crore is equivalent to 5 per cent of its average turnover from the relevant market from 2014-15 to 2016-17.
A complaint alleging unfair business practices was filed against the Association of Man-Made Fibre Industry of India, Grasim Industries, Thai Rayon and Indo Bharat Rayon. The three companies are part of the Aditya Birla Group.
According to the Commission, Grasim Industries imposed supplementary obligations upon the spinners which by their very nature or according to commercial usage, have no connection with the subject of such contracts.
Fibre2Fashion News Desk (DS)
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