Fair trade regulator CCI has ordered a detailed probe against Uttarakhand Agricultural Produce Marketing Board for alleged anti-competitive ways in procurement of Indian Made Foreign Liquor (IMFL) in the state.
Uttarakhand Agricultural Produce Marketing Board is the exclusive wholesale licensee of foreign liquor, including IMFL, in the hill state.
CCI has decided to start investigation after prima-facie finding violations of competition norms.
The decision of the Competition Commission of India (CCI) has come on a complaint from the International Spirits and Wines Association of India, a grouping of international spirits and wine companies having business in India.
The complaint was also filed against Garhwal Mandal Vikas Nigam and Kumaun Garhwal Mandal Vikas Nigam -- the exclusive sub-wholesalers of foreign liquor in Uttarakhand.
It was alleged that Uttarakhand Agricultural Produce Marketing Board placed orders with alcoholic beverage manufacturers for supply of IMFL in an arbitrary and discriminatory manner with no relation to the consumer demand in the market.
The Commission noted that the Board along with its sub-wholesalers are the only source of procurement and distribution of alcoholic beverages in Uttarakhand and there appears to be a steep decline in the quantum of procurement of certain IMFL brands in 2015 as against 2014.
"... Being the only source of procurement and distribution of alcoholic beverages in the state of Uttarakhand, the discriminatory and arbitrary procurement/ distribution by opposite parties from IMFL manufacturers distorts competition," the watchdog noted.
The Commission said it is prima-facie convinced that such conduct has limited and restricted production of IMFL and resulted in denial of market access, according to the order dated July 19.
Citing sudden decline in the procurement of IMFL brands of some companies between August and October 2015, along with retailer concerns about the non-availability of IMFL brands, CCI noted that the Board has not made procurement of IMFL in accordance with the actual consumer demand.
