CCI penalises United Breweries India and Carlsberg India for carterlisation

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Competition Commission of India (CCI) on September 24 has imposed penalties of around ₹900 crore on three beer-making companies as well as their trade association All India Brewers’ Association (AIBA) for cartelisation.

The antitrust body in a statement said that SABMiller India (makers of foster beer),  United Breweries (makers of Kingfisher beer) and Carlsberg India were indulging in cartelisation in the sale and supply of beer in various states and union territories in India between 2009 to at least October 2018.

While the CCI has directed United Breweries and Carlsberg India to pay penalties of Rs 750 crore and Rs 120 crore respectively, it has given SABMiller India 100 percent reduction in penalty for cooperating in the investigation.

SABMiller India is now known as Anheuser Busch InBev India.

The CCI in its statement today said that the three companies engaged in price coordination in Andhra Pradesh, Karnataka, Maharashtra, Odisha, Rajasthan, West Bengal, Delhi and Puducherry.

The three companies were also collectively restricting the supply of beer to Maharashtra, Odisha and West Bengal and were also co-ordination with respect to the supply of beer to premium institutions in Bengaluru.

CCI also found coordination amongst United Breweries and Anheuser Busch InBev India with respect to purchasing of second-hand bottles.

Furthermore, four individuals of United Breweries, four individuals of Anheuser Busch InBev India, six individuals of Carlsberg India, and the Director General of AIBA, were held by CCI to be liable for the anti-competitive conduct of their respective companies and association.

“We are pleased with the outcome of this order and the opportunity to contribute to the competitive environment in India. The CCI decided that we were the sole company identified as receiving no penalty whatsoever and noted that we had “initiated internal definitive corrective administrative and HR measures” as well as “initiated widespread compliance programs for its employees.”  We are pleased with these comments as we take compliance and ethics very seriously” said Spokesperson, AB InBev India.

The CCI in 2018 raided the offices of the three brewers and started an inquiry that cast a shadow on the brewers, which account for for 88% of India's $7 billion beer market.

Executives’ conversations, WhatsApp messages, and e-mails contained in the report show the companies regularly and collectively strategised in seeking price increases in “several states”, forging a cartel, the CCI said, that gave them more bargaining power with state authorities.

The companies also used the AIBA as a “common platform” to decide collectively on prices; and the local group then lobbied on the companies’ behalf for price increases, the CCI report found.