close

Liquor makers approach NCLAT, allege abuse of dominance by KSBC

Liquor industry bodies CIABC and ADBVI have approached the NCLAT alleging abuse of dominant position by the Kerala State Beverages (Manufacturing and Marketing) Corporation in the state

Gavel, order, judiciary, courts, laws

New Delhi
Liquor industry bodies CIABC and ADBVI have approached the NCLAT alleging abuse of dominant position by the Kerala State Beverages (Manufacturing and Marketing) Corporation in the state.
The Confederation of Indian Alcoholic Beverage Companies (CIABC) and Association of Distillers Brewers and Vintners of India (ADBVI) have challenged an earlier order passed by the Competition Commission of India (CCI), which had in October 2020 rejected their pleas and said there exists no prima facie case.
The National Company Law Appellate Tribunal (NCLAT), which is an appellate authority, on January 24 issued notice to the Kerala State Beverages Corporation (KSBC) and Travancore Sugar and Chemicals Ltd (TSCL) on their pleas.
"Issue notice to Respondents No. 2 (KSBC) and 3 (TSCL) returnable within four weeks. Requisites along with process fee be filed within three days," the NCLAT order said.
The appellate tribunal has fixed February 28 as the next date of hearing.
Kerala State Beverages (Manufacturing and Marketing) Corporation is a public sector body entrusted with exclusive control over the procurement, wholesale and retail sale of liquor in the state.

Also Read

'Centre emasculating tribunals by not making appointments,' says SC

NCLAT stays CCI order imposing Rs 873 cr penalty on UBL, other beer makers

NCLAT to hear Amazon plea challenging CCI order in Future deal on Feb 2

Hindustan Paper Corp under liquidation on directions of NCLT, NCLAT: Govt

NCLAT asks NCLT to give hearing opportunity to two Videocon execs

Minor impact of new Covid-19 wave on sales, says Abhishek Lodha

Uday Shankar, James Murdoch firm to pick up 39% stake in Viacom 18

Tata group lone Indian brand in top 100: Brand Finance Global 500 report

o9 Solutions' valuation crosses $2.7 billion after $295 million funding

Tata group to take control of debt-laden Air India on Friday

In 2001, KSBC was also entrusted with the majority of retail outlets for the sale of alcoholic beverages in Kerala.
The associations submitted before the CCI that the entire supply chain, from procurement to distribution and sale of liquor, including India Made Foreign Liquor (IMFL), beer, wine, Foreign Made Foreign Liquor (FMFL) and Foreign Made Wine (FMW), in Kerala is controlled by it.
They had alleged that KSBC, for the purpose of procurement of liquor, floats tenders periodically, inviting liquor manufacturers to participate, and "unilaterally and unfairly" fixes the contract price.
Moreover, abusing its dominant position, it imposes "unfair and discriminatory prices and terms on private alcoholic beverages manufacturers as against government brands and leverages its monopoly position by providing favourable prices as well as terms and conditions in the purchase of the product of TSCL".
It was alleged that KSBC grants preferential treatment to TSCL in terms of lower wholesale margin, lower cash discount, and priority in unloading at depots, thereby placing private brands at a competitive disadvantage.
However, this was rejected by the CCI, which observed that several manufacturers were supplying multiple liquor brands to KSBC whereas TSCL was supplying only one brand of rum.
The CCI had also observed that the complainants had not been able to demonstrate how competition, in general, with the existence of so many brands in the market, was adversely affected.
"In light of the facts and evidence on record and based on the submissions of parties, the allegations of abuse raised by the Informants are not found to be validated and no case of contravention of provisions of Section 4 of the Act can be stated to have arisen...," the CCI had said.
Act refers to the Competition Act, 2002. Section 4 of the Act relates to the abuse of dominant position.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Jan 27 2022 | 1:20 AM IST

Explore News