CCI penalises beer companies for indulging in cartelisation
24 Sep 2021
Competition Commission of India (CCI) has passed a final order against three beer companies, namely United Breweries Limited (UBL), SABMiller India Limited (now renamed as Anheuser Busch InBev India Ltd or AB InBev) and Carlsberg India Private Limited (CIPL) for indulging in cartelisation in the sale and supply of beer in various states and union territories, including through the platform of All India Brewers’ Association (AIBA).
As AIBA was found to be actively involved in facilitating such cartelisation, CCI also held AIBA to be in contravention of the provisions of Competition Act, 2002, apart from the beer companies. The cartel was found to have operated from 2009 to at least 10 October 2018 (the date on which the Director General (DG) conducted search and seizure operations at the premises of the beer companies). CIPL joined the cartel in 2012 while AIBA served as a platform for facilitating such cartelisation since 2013. All three beer companies moved applications before the CCI seeking lesser penalty.
Based on evidences of regular communications between the parties collected by the DG during search and seizure, and on the basis of the disclosures made in the lesser penalty applications, CCI found that the three companies engaged in price co-ordination in contravention of the provisions of Section 3(3)(a) of the Competition Act, 2002 in the states of Andhra Pradesh, Karnataka, Maharashtra, Odisha, Rajasthan, West Bengal, National Capital Territory of Delhi and the Union Territory of Puducherry, in collectively restricting supply of beer in the states of Maharashtra, Odisha and West Bengal in contravention of the provisions of Section 3(3)(b) of the Act, and in sharing of market in the state of Maharashtra as well as co-ordination with respect to supply of beer to premium institutions in the city of Bengaluru in contravention of the provisions of Section 3(3)(c) of the Act.
CCI also found co-ordination amongst UBL and AB InBev with respect to purchase of second-hand bottles. Further, four individuals of UBL, four individuals of AB InBev, six individuals of CIPL and the director general of AIBA, were held by CCI to be liable for the anti-competitive conduct of their respective companies/ association, in terms of Section 48 of the Act.
While giving benefit of reduction in penalty under the provisions of Section 46 of the Act of 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 CCI directed UBL and CIPL to pay penalties of approximately Rs750 crore and Rs120 crore, respectively, besides passing a cease-and-desist order.