CCI closes case against Goa's druggists association

Competition Commission has rejected allegations of unfair business practices made against Goa's Chemists and Druggists Association with regard to supply of drugs to a particular entity.
While the majority order by four members concluded that there was no evidence of competition norms violations by the entity, one CCI member decided to impose penalty.
The majority ruling has come after a detailed probe by CCI's investigation arm Director General (DG), which had concluded that there are competition norm violations.
The complaint was filed by medicines distributor Royal Agency against the Chemists and Druggists Association, Goa (Opposite Party 1) and Franco-Indian Pharmaceuticals (OP 2).

It was alleged that medicines supply was discontinued for sometime due to intervention by OP 1 who had coerced OP 2. Royal Agency was made a distributor of OP 2 in 2013.
The Commission finds that based on the evidence and material available on record, no contravention of the provisions of section 3 of Competition Act by the opposite parties has been established, as per majority order by four members - S L Bunker, Sudhir Mital, U C Nahta and M S Sahoo.

Section 3 pertains to anti-competitive agreements.
Citing available information, Competition Commission of India (CCI) said Drogaria Menezes and Cia's proprietor Agostinho Menezes has been an authorised distributor of OP 2 and Royal Agency's Maria proprietor Rodrigues worked with him for about 30 years before leaving in April 2013.

"In August 2013, Agostinho Menezes learnt that the informant was appointed as a distributor of OP 2 and was supplying to the customers of Agostinho Menezes. Therefore, quite evidently, the informant was working as a competitor of Agostinho Menezes which probably led to a conflict of interest between them," it said in an order dated October 27.
The majority order noted that even though the DG has concluded that OP 1 has played an active role in discontinuation of supplies to the informant, the same is not supported by sufficient evidence.
In his dissenting order, CCI member Augustine Peter has imposed a total penalty of Rs 1.26 crore on five entities -- the association, Franco Indian Pharma, Drogaria Menezes and Cia, Agostinho Menezes and Ramesh Chaturvedi, distribution manager at Franco Indian.

The association is found to be limiting the provision of supply of drugs and medicines in Goa and has earlier been penalised for similar offence, Peter said in his order.
Also, Agosthino Menezes in his dual capacity as proprietor of Drogaria Menezes and Cia and as the wholesalers chairman of the association has been responsible for entering into an agreement with Franco Indian Pharmaceuticals for distributorship and further influencing OP 2 to stop supply of products to the informant, it added.