The Competition Commission of India has ordered a probe against Asian Paints for allegedly hindering the entry of JSW Paints by virtue of its dominance in the market for manufacture and sale of decorative paints.
The order came after JSW Paints filed a complaint alleging that Asian Paints threatened various dealers in Karnataka, Telangana and Tamil Nadu from dealing with JSW Paints.
"The Commission is of the view that evidence provided by JSW Paints is prima-facie sufficient to indicate that Asian Paints has denied access to the distribution channels in the relevant market to JSW Paints by threatening and coercing such dealers through various means," the fair trade regulator said.
It added that Asian Paints, "prima-facie", appears to be in contravention of provisions of the Competition Act.
Commenting on the Competition Commission's order, Asian Paints in a regulatory filing to the exchanges said, "The company is currently examining the order and will take appropriate legal recourse and will extend full cooperation to CCI in the matter."
It also said "the alleged restrictions on dealers not to deal with JSW Paints or any other company manufacturing paints can create barriers for suppliers of paints, who compete with these suppliers besides not allowing the benefit of better prices to the consumers."
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