CCI passes 'cease and desist' orders against AIOCD, others

Competition Commission has slapped penalty of Rs 5.61 lakh on ADDA

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Competition Commission has directed the leading grouping of chemists and druggists, AIOCD, to cease and desist from unfair trade practices that restrict supply of medicines in the market.

Finding them in violation of competition norms, the fair trade watchdog has passed orders against All India Organization of Chemists and Druggists (AIOCD) and its affiliates -- All Kerala Chemists & Druggists Association (AKCDA), Assam Drug Dealers Association (ADDA) and Barpeta Drugs Dealers Association (BDDA).

Further, the Competition Commission of India (CCI) has slapped penalty of Rs 5.61 lakh on ADDA. Since their financial statements were not immediately available, the regulator said that fine on drug associations of Kerala and Barpeta would decided later at an appropriate time.

As a fine of Rs 47.40 lakh was already slapped on AIOCD in an earlier case for similar violations, the Commission said it "does not consider it appropriate to impose any further monetary penalty" on this association.

In two separate orders, the Commission has all these associations to "cease and desist from indulging in and following the practices which have been found anti-competitive in violation...Of the (Competition) Act".

The rulings, dated December 9, came on complaints that these associations were abusing their dominant position by limiting and restricting supply of pharmaceutical drugs.

A probe by the Director General (DG) -- the investigation arm of the Commission -- found that AIOCD and its affiliated associations resorted to the practice of boycott of pharmaceutical companies and their products to enforce certain requirements related to 'No Objection Certificate (NOC)', 'Product Information Service (PIS)' and fixed trade margins, among others.

As per the findings, the pharmaceutical firms often stop supplies to the stockists under the threat of boycott of sale or purchase of the products of the company by the AIOCD  and its affiliated associations, CCI said in one of the orders.

CCI has also asked AIOCD and its other affiliates to file an undertaking that the practices carried on by their members on the issue of grant of NOC for appointment of stockists, fixation of trade margins, collection of PIS charges and boycott of products of pharma firma have been discontinued.

Among others, it has also asked to inform all chemists and druggists and all its members and associations that they were free to give discounts to the customers.