March 24, 2020

Grasim Industries fined to the tune of Rs. 302 crores by CCI

[ by Legal Era News Network ]


Aditya Birla Group company Grasim Industries and its subsidiaries have been fined with Rs. 302 crore by the Competition Commission of India (CCI) for indulging in unfair and discriminatory pricing practices using its dominant position in the viscose staple fibre (VSF) market.

A complaint filed with the CCI alleged that the company has been 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 segregated the domestic customers into two groups — manufacturers and suppliers of yarn to the Indian market and exporters of the yarn. This practice has allegedly kept some customers at a competitive disadvantage to peers.

It was also alleged that Grasim was forcing its domestic customers to submit their monthly yarn production data before deciding on the discount rate applicable to them.

The competition watchdog has directed the company to set up a discount policy that is transparent and non-discriminatory to all the market participants.

According to the CCI, 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 CCI has directed the company to cease and desist from indulging in practices of adopting unfair/discriminatory pricing practices and refrain from seeking the consumption details of VSF from the buyers.

The company has also been directed not to place any end-use restriction on the VSF buyers and that they should be open to them to using the same for spinning or trading or any other purpose, as permissible under law.

Grasim Industries is the largest producer and seller of VSF with a market share of almost 100 % in India. The complainant alleged that the company is misusing its position in the domestic market to squeeze textile industry consumers. The CCI has withheld the name of the informant.

Grasim believes that based on merit, it has sufficient grounds to appeal.

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