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The Competition Commission of India (CCI) has rejected a complaint filed by International Spirits and Wines Association of India (ISWAI) against Andhra Pradesh State Beverages Corporation Limited (APSBCL), the State monopoly for procurement and distribution of alcoholic beverages and retail sales.
ISWAI had alleged arbitrary procurement of alcoholic beverages by APSBCL and imposition of unfair and exploitative terms on suppliers and/or manufacturers of alcoholic beverages who are ISWAI members in Andhra Pradesh.
This conduct was alleged to be in contravention of Section 4 of the Competition Act, 2002, which prohibits imposition of unfair and discriminatory conditions by dominant undertakings.
The complaint also alleged that APSBCL discriminates against members of ISWAI, causing them significant commercial losses. ISWAI counts among its members several leading international spirits and wines companies with business operations in India.
Pandemic impact
While holding APSBCL to be dominant in the “market for wholesale procurement, distribution and retail sale of branded alcoholic beverages”, CCI noted in its order, issued on Tuesday, that though there was an apparent declining trend of market share of ISWAI members, there was no concrete evidence to suggest it was due to the alleged anti-competitive conducts of Andhra Pradesh government and APSBCL.
The decline in market share may be attributed to various reasons, such as change in State policies, Covid-19 pandemic, change of customer preferences, and entry of new competitors/brands in the industry, CCI said. Further, the referred period of decline coincided with the pandemic,which drastically affected the demand and supply of various goods and services and not just alcoholic beverages.
Payment delay
On delayed disbursal of payments by APSBCL to wine companies, CCI rejected APSBCL’s contention that “being a government-owned company”, it has “some leeway in delaying payments to suppliers”.
CCI observed in the order that departments are expected to improve their functioning when they operate in a commercial space for procurement and sale of goods and services.
However, in the present case, it extended the benefit of doubt to Government of Andhra Pradesh/ APSBCL in view of the assertion that the delays owed to transfer of retail trade to APSBCL and that it was taking earnest steps to clear the dues of the manufacturers, including members of ISWAI.
CCI did not find the allegations made by ISWAI to be validated and, accordingly, closed the matter.
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