Comments
The Competition Commission of India (CCI) has levied a fine of ₹302 crore on Aditya Birla Group company Grasim Industries and its subsidiaries for indulging in unfair and discriminatory pricing practices using its dominant position in the viscose staple fibre (VSF) market.
The CCI has also directed the company to put in place a discount policy that is transparent and non-discriminatory to all the market participants.
In a statement, Grasim said it is yet to receive the CCI order, but believes that based on merit, it has sufficient grounds to appeal.
In a 62-page order, the competition watchdog said the company has abused its dominant position in the ‘market for supply of VSF to spinners in India’ by charging discriminatory prices to its customers, besides imposing supplementary obligations on them in violation of the law.
The Commission directed the company to cease and desist from indulging in such practices of adopting unfair/discriminatory pricing practices and refrain from seeking the consumption details of VSF from the buyers.
No end-use restriction
The company has been told not to place any end-use restriction on the VSF buyers; they should be open to them to using the same for spinning or trading or any other purpose, as permissible under law, said the CCI, while withholding the name of the entity which filed the case.
Grasim Industries is the largest producer and seller of VSF with a market share of almost 100 per cent in India. The complainant alleged that the company is misusing its position in the domestic market to squeeze textile industry consumers.
Discriminatory pricing
It was alleged that the company is selling VSF at lower rates to its international customers and at a much higher price to its domestic customers.
Further, the complainant alleged that Grasim has segmented the domestic customers into two groups — those who are manufacture and supply yarn to the India market and those who export the yarn. This practice has kept some customers at a competitive disadvantage to peers.
Further, it was alleged that Grasim was forcing its domestic customers to submit their monthly yarn production data before deciding on the discount rate applicable to them.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.