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INDIA FINED STATE-RUN EXCLUSIVE LIQUOR DISTRIBUTOR FOR ANTI-COMPETITION PROCUREMENT

By Siulan Law Mathews DipWSET

1-4-2021



Credit: Elle/Unsplash

India’s Competition Commission has imposed a fine of Rs10 million (USD136,980) yesterday on Uttarakhand Agricultural Produce Marketing Board for abusing its exclusive licence and indulged in arbitrary procurement of alcoholic beverages resulting in denial of market access for some producers.

The regulator ordered the investigation in 2016 after receiving a complaint from International Spirits and Wines Association of India (ISWAI) against the marketing board and its two sub-wholesalers.

The regulator has directed the board to pay the fine within 60 days as well as "cease and desist" from indulging in anti-competition practices.

The board has also entered into agreements with certain members of ISWAI which had been treated unfairly by the marketing board.

In yesterday’s order, the regulator said that the marketing board, being the exclusive wholesale licensee, had abused its exclusive rights and procure alcoholic beverages arbitrarily resulting in denial of market access by some producers.

According to the regulator, the arbitrary procurement by the board had led to an increase in sales of brands of some manufacturers but hurt the sales of others.

The regulator said: “The inappropriate manner by the entity led to some brands/ players attaining an undue advantage over others and harming the sales of others thereby distorting the competition in the market.”

"The arbitrary action led to a situation where the preferences of the end consumers were not taken into account, thereby distorting the market to the detriment of manufacturers of certain brands of alcoholic beverages.”

The regulator holds that the unilateral conduct of the board had impacted market competition of alcoholic beverages in the state of Uttarakhand.

The marketing board was given the exclusive wholesale licence in 2015 after the liquor wholesale order was passed, as the only licensee it had exclusive right to procure and distribute foreign liquor/beer/wine, including Indian Made Foreign Liquor in the state.

Since start of the investigation in 2016, the board has been discharged from all responsibilities of dealing with the procurement of alcoholic beverages in the state.

(the writer can be contacted at: info@thewinechronicle.com)

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