CCI imposes fine of Rs 380 million on sugar firms and their associations

The Competition Commission of India (CCI) has imposed a fine of Rs 380 million on sugar companies and their associations for alleged rigging of the ethanol tender in 2013. Sugar association ISMA has also been pulled up by the anti-trust regulator. The association, Indian Sugar Mills Association (ISMA), has been asked to pay 10 per cent of its annual receipts for the year as penalty. The tender was floated by oil marketing companies — HPCL, BPCL and IOCL — in 2013 for procurement of ethanol for blending with petrol. CCI based the penalties on the revenue generated by the sugar mills only from sale of ethanol. 

The penalty was imposed by the commission at 7 per cent of the average relevant turnover of the sugar mills. However, a penalty at 10 per cent of the average receipts was imposed upon trade associations that include ISMA and Ethanol Manufacturers Association of India (EMAI), keeping in mind the role they played in facilitating the rigging of bids. The commission said: "This was evident from the prices quoted, quantities offered, and explanations given by the parties. Such collusion was further strengthened from the fact that the bidders utilised the ISMA platform and also acted on signals by the EMAI, which influenced the bidding behavior of the parties."

The CCI order has come on separate complaints filed by India Glycols, Ester India Chemicals, Jubilant Life Sciences, A B Sugars, Wave Distilleries and Breweries and Lords Distillery.