'Not substantiated': CCI drops JSW Paints' plea against Asian Paints

JSW Paints also told CCI that Asian Paints allegedly also pressurised enterprises that provided infrastructure facilities like warehouses to JSW Paints to not stock products of JSW Paints

Competition Commission of India (CCI) has disposed of JSW Paints plea, which stated that Asian Paints blocked its entry into the decorative paints segment.

The antitrust body stated, in its order dated September 8, that, “The commission is of the view that the balance is not tilted towards JSW Paints. Asian Paints has been able to demonstrate that some of its conduct or practices adopted via the dealers were in furtherance of its terms of doing business with such dealers. It was not to keep JSW Paints away from the market.”

JSW Paints had gone to CCI in 2019 and alleged that immediately after the launch of its decorative paints business, Asian Paints had targeted dealers/distributors/retailers partnering JSW Paints.

It directed them to stop dealing with JSW and threatened stopping supplies to these dealers. It also asked dealers to remove displays of JSW Paints’ products from their retail shelves and threatened of not allowing them discretionary discounts, among others.

JSW Paints also told CCI that Asian Paints allegedly pressurised enterprises that provided infrastructure facilities like warehouses to JSW Paints to not stock their products.

The enterprise that provided the warehouse facility rescinded the contract with JSW Paints on account of Asian Paints asking them to choose between itself and JSW.

It also alleged that the rescission of contract led to delay in the launch of JSW’s products in Hubli. This resulted in loss of revenue, reputation and credibility.

The antitrust body’s director-general (DG) concluded that Asian Paints enjoys a position of dominance in the decorative paints market on the basis of its highest share for a substantial period of time.

It stated in its report, “Asian Paints, the market leader, was able to make a net addition of 401 and 816 dealers during 2019-20 and 2020-21 (total of 1,217). This is against new entrant JSW Paints’ net addition of 722 and 869 dealers during the same period (total 1,591). Therefore, the fact and figures of net addition of dealers during the relevant period contradicts the allegation of denial of market access to JSW Paints.”

The order also stated that, “The DG found that even the allegation of dealers being under pressure from Asian Paints not to deal with JSW Paints is not substantiated.”

The DG’s report also said, according to the order, only 15 dealers out of the 1,378 allegedly common dealers came forward and levelled allegations against Asian Paints.