CCI might fine Bengal Chemists and Druggist Association

The competition watchdog likely to send a show cause notice to chemists and druggists' association

Bengal Chemists and Druggist Association could face a fine from the Competition Commission of India (CCI) for not allowing individual chemists to sell some essential medicines below maximum retail price (MRP).

The competition watchdog had referred the case for an investigation after it received complaints from some individual chemists. According to a CCI official, the report of its director-general (investigation) has been submitted now.

“The investigation shows that the Association has used its dominant position to curtail price competition in the market and therefore it is likely to be penalised,” the official said. He added the commission is currently evaluating the findings of the report and prima facie it seems there is enough evidence against the association.

The competition watchdog, in line with its routine process, is likely to send a show cause notice to the association, allowing it to present its case before the commission by way of detailed response.

Experts say, retailers have good margin and often offer discounts to lure customers. In such a situation it is unfair on part of any association to discourage its members from selling medicines below MRP as this can mean hampering competition in the market, which benefits consumers as well as the retailers.

Recently, following a complaint filed by Cuttack-based Santuka Associates, the CCI found All India Organisation of Chemists and Druggists guilty of indulging in unfair trade practices that influenced the prices of medicines and control of supplies. The Commission slapped a penalty of Rs 47.41 lakh on the trade body and ordered it to desist from these unfair practices.

It has also asked the trade body to stop issuing no objection certificates for appointment of stockists, fixation of trade margins and unlawful trade activities.