CCI dismisses alleged unfair business practices complaint against KAMCO

Fair trade regulator CCI has dismissed a complaint of alleged unfair business practices against Kerala Agro Machinery Corporation Ltd (KAMCO).

The complaint was filed by Andhra Pradesh based Venkateswara Agencies which deals in agricultural machineries.

KAMCO was established in 1973 for manufacturing agricultural machinery and became a separate Government of Kerala undertaking in 1986.

Venkateswara has been the authorised dealer for KAMCO since 2006 for supplying products of KAMCO to West Godavari, East Godavari, Krishna, Srikakulam and Guntur districts of Andhra Pradesh.

Initially the agreement was for one year, but continued till 2018.

Venkateswara alleged that KAMCO gave authorized dealerships to other dealers for Guntur, Vijayawada and Srikakulam, in spite of the fact that it continued to hold the authorised dealership.

 

However, the Competition Commission of India (CCI) said that "the Commission is of the view that no competition concern is involved in the appointing of new dealers in the areas where the informant has dealership."

Informant refers to Venkateswara Agencies.

In fact appointment of more dealers in an area would tend to improve intra-brand competition and ensure wider choice to consumers unless it is shown that an exclusive agreement has certain pro-competitive effects, it added.

Venkateswara further alleged that KAMCO stopped issuing new stock of products in an arbitrary manner as a result of which the informant incurred debt to the tune of Rs 5 crore in order to buy new stock from other unauthorised dealers in the market at high rate.

Considering the information on this allegation, CCI noted that KAMCO had supplied machineries and spare parts in November and December 2016 and KAMCO denied that the informant had suffered huge loss due to non-supply of new stock.

CCI said there is neither any exclusionary abuse nor it "prima facie" appears to be a case of such conduct as the agreement between the informant and KAMCO expressly mentions that new dealers may be appointed in the interest of sales of products.

Accordingly, CCI closed the case noting that "it does not appear that KAMCO has indulged in any abusive conduct, so as to warrant any investigation into the same.