Competition Commission has ordered a detailed probe against Aditya Birla group firm Grasim Industries for alleged discriminatory pricing ways in the sale of viscose staple fibre, a raw material used for making fabric.
It has been alleged that the company offered different discounts to different customers for the sale of viscose staple fibre (VSF).
The watchdog has called for an probe by the Director General (DG) -- its investigation arm -- after prima facie finding evidence of competition norms violations.
Apart from allegations of the company selling VSF at higher rates to domestic customers compared to foreign ones, it was alleged that the firm controlled volume of VSF production in the local market as well as arbitrarily cut down production to increase prices.
For the case, Competition Commission of India (CCI) considered 'market of VSF in India', as the relevant market. It found that Grasim Industries is a dominant player in that market.
Viscose yarn is used to manufacture fabric which in turn is used for producing readymade garments and various types of apparels.
Ordering the probe, the regulator said it "is of the prima facie view that OP 2 (Grasim Industries) appears to be imposing unfair and discriminatory pricing on the informant and certain other textile manufacturers and leveraging its dominant position in the relevant market of VSF in the downstream market of textile products".
Apart from Grasim Industries, the complaint was also filed against Association of Man-made Fibre Industry of India (Opposite Party OP 1) as well as group companies -- Thai Rayon (OP 3) and Indo Bharat Rayon (OP 4).
The regulator observed that Grasim Industries offered larger discounts to the domestic customers who export their textile products compared to those who compete with its subsidiaries in the downstream domestic market.
It also appears that Grasim Industries in order to protect its business interests, alongwith its entire value chain in the domestic market, has adopted discriminatory pricing policy by segmenting the buyers in the VSF market which is "unfair and discriminatory" in terms of Competition Act provisions, the watchdog said in a recent order.
Further, CCI said it observes that Grasim Industries has been leveraging its strength derived from the relevant market of manufacture and sale of VSF in the downstream markets of manufacture and sale of textile products which is in contravention of competition norms.
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