Companies were found engaged in price coordination in Andhra Pradesh, Karnataka, Maharashtra, Odisha, Rajasthan, West Bengal, National Capital Territory of Delhi and Union Territory of Puducherry.
The Competition Commission on Friday fined United Breweries Ltd., Carlsberg India, All India Brewers’ Association (AIBA) and 11 individuals for a total of more than ₹873 crore for factionalism in the sale and supply of beer.
In its 231-page order that came nearly four years after a detailed inquiry was ordered, the Competition Commission of India (CCI) has directed companies, associations and individuals to “shut down and abstain” from anti-competitive practices in future.
The final order has been passed against United Breweries Limited (UBL), SABMiller India Ltd, now renamed as Anheuser Busch InBev India Ltd (AB InBev) and Carlsberg India Pvt Ltd (CIPL) among other entities .
The regulator did not impose any penalty on Ab InBev, while others have been fined less.
An official release said companies and other entities “have been found to be involved in cartelization in the sale and supply of beer to various states and union territories in India through the platform of All India Brewers Association (AIBA)”.
As AIBA was found to be actively involved in facilitating such cartelisation, the CCI has also considered this to be a violation of competition law.
“Granting the benefit of penalty reduction…100 per cent to AB InBev and its individuals, 40 per cent to UBL and its individuals and 20 per cent to CIPL and its individuals,” the release said.
UBL and Carlsberg India have been fined around ₹752 crore and ₹121 crore respectively. AIBA has been fined over ₹6.25 lakh and various individuals have also been fined by the regulator.
The period of cartelization was considered from 2009 to at least October 10, 2018, with CIPL joining since 2012 and AIBA acting as a platform to facilitate such cartelisation since 2013. All three beer companies were low penalty applicants before the regulator.
According to the release, October 10, 2018 was the date on which the Director General (DG) conducted the search and seizure operation at the premises of the beer companies.
Based on the evidence of regular communication between the parties collected by the DG during search and seizure and disclosures made in the applications for lesser penalty, the CCI found that three companies engaged in price coordination, which were not based on competition norms, the release said. violation, the release said.
The CCI, which monitors unfair trade practices across sectors, in October 2017 ordered a detailed inquiry by its investigative wing DG.
The matter was taken suo motu by the regulator after Crown Bears India Pvt Ltd filed an application under Section 46 of the Competition Act. Ltd. and Submariner India Ltd., both were finally held in July 2017 by AB InBev against UBL, Carlsberg India and AIBA.
Section 46 deals with the provision of less fine.
Companies were found engaged in price coordination in Andhra Pradesh, Karnataka, Maharashtra, Odisha, Rajasthan, West Bengal, National Capital Territory of Delhi and Union Territory of Puducherry.
In addition, they were “collectively restricting the supply of beer to the states of Maharashtra, Odisha and West Bengal … and were found to be in coordination with regard to market sharing as well as supply of beer in the state of Maharashtra were premium institutes in Bengaluru city,” the release said.
In addition, the fair trade regulator also found coordination between UBL and AB InBev for the purchase of used bottles.
In addition, “4 persons from UBL, 4 persons from AB InBev, 6 persons from CIPL and Director General of AIBA, were held liable by CCI for anti-competitive conduct of their respective companies/consortium,” the release said.
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