CCI to decide on probe into Asian Paints for 'abuse' of dominant position

The allegations against Asian Paints include restricting dealers from doing business with Grasim's Birla Opus

The Competition Commission of India (CCI) has received comments from both Birla Opus and Asian Paints on its queries, and is likely to take a decision in the next few days on whether to start an investigation against Asian Paints for abuse of dominant position alleged by the Aditya Birla group firm, which is a competitor, sources said.

 

The antitrust watchdog had received a complaint from the paint venture of the Aditya Birla group in November last year, the sources said, alleging that Asian Paints, which is the market leader with 53 per cent market share, had indulged in anti-competitive conduct and exclusionary practices.

 

The allegations included restricting dealers from doing business with Grasim’s Birla Opus. Grasim is a flagship company of the Aditya Birla group. It was also alleged that Asian Paints had put pressure on raw material suppliers to deny (supplies) or price-discriminate against Birla Opus.

 

Asian Paints said in an email response that it did not have any comment to offer at this stage while Birla Opus did not respond to Business Standard’s query till the time of going to the press. 

 

This is not the first time that the CCI has received a complaint against Asian Paints. In 2019, JSW Paints had gone to the CCI, alleging that immediately after the launch of its decorative paint business, Asian Paints began arm-twisting dealers who had agreed to stock and display decorative paints manufactured by the company.

 

JSW Paints had also told the CCI that Asian Paints allegedly coerced enterprises that provided infrastructure facilities like warehouses to the company to not stock its products.

 

The CCI, however, disposed of JSW Paints’ plea and said: “The commission is of the view that the balance is not tilted towards JSW Paints. Asian Paints has been able to demonstrate that some of its conduct or practices adopted qua the dealers was in furtherance of its terms of doing business with such dealers and not to keep JSW Paints away from the market.”

 

While talking about competition heating up in the market, Amit Syngle, managing director and chief executive officer (MD&CEO) of Asian Paints, told investors after announcing the company’s January-March 2024-25 (Q4FY25) earnings that the firm has always seen competition in the market.

 

“We have had newer players like JSW and Indigo, and so on and so forth, which have come into the market. Yes, this year we’ve seen the force of what, three-four new other players that have kind of come into the market… So, I would say that possibly to some extent, in a market which is already slow, the intensity of competitive action has been much more…, Syngle said.

 

He added, “I think (it’s a) double whammy — a combination of the market slowing down, plus the increased competition coming from both the existing and the newer players.”

 

Himanshu Kapania, MD at Grasim Industries, also told investors post its earnings call that it is a matter of pride to share that in less than six months of pan-India operations, Birla Opus has become India’s number three decorative paints brand, as per its internal estimates.