Jute mills face cartelisation charges, get CCI notice

Indian Jute Mills Association represents 34 of the 83 operating mills in the country. Among these, 54 are in West Bengal

The Competition Commission of India (CCI) has sent showcause notices to all member-mills and officebearers of the Indian Jute Mills Association (Ijma), the apex body of the jute industry, for alleged violation of the Competition Act of 2002.

Ijma represents 34 of the 83 operating mills. Among these, 54 are in West Bengal. The members and officebearers are to reply through filing of affidavits within two weeks from the date of the notice. The officebearers will have to appear in person before the Commission.

Ijma chairman Raghav Gupta said, “We will furnish a reply to the  notice within the due date. The allegations are totally baseless.”

Gupta added the notices would not impact supply commitments.

The Indian Sugar Mills Association (Isma), had accused Ijma of violating Section 3 and Section 4 of the Competition Act by  cartelising, manipulating and rigging prices to exploit consumers of jute bags.

Ijma is also accused of creating an anti-competitive market, thereby limiting technical progress and development. CCI found substance in the allegation and investigated the matter.

The Commission concluded that Ijma and its members had contravened provisions in sub-section 1 and 2 of Section 3 of the Act. The sugar association further alleged the jute body was hand-in-glove with the Gunny Trades Association (GTA), a merchant body engaged to offer daily price quotes of jute goods, especially gunny bags.

According to the recent notice issued by Saroj Kumar Gupta, deputy director-general (law) of CCI, the Commission has concluded that Ijma members and officebearers had contravened Section 3 of the Act and its clauses. The accused will have to disprove the charges against them.

The notices will also assess the role played by Ijma and its officebearers under Section 41 (2), 36 (2) and 48 (1) of the Act. The notices were sent on the basis of a case filed against Ijma and GTA by Isma, All India Flat Tape Manufacturers Association and National Federation of Co-operative Sugar Factories on  August 2, 2011.

In 1998 and 2002, the government exempted the cement and fertiliser sector from packing their materials in jute bags. In the agricultural season of 2012-13, the sugar industry was allowed to pack 60 per cent of its materials in plastic bags. In 2013-14, the jute Standing Advisory Committee has raised this  to 80 per cent.