Competition Commission fines Kerala's chemists grouping

The Competition Commission has imposed a total penalty of nearly Rs 10 lakh on Kerala-based chemists' grouping AKCDA, its two district associations and six office bearers for indulging in unfair business practices.

The fair-trade regulator has slapped a fine of Rs 4.79 lakh on All Kerala Chemists and Druggists Association (AKCDA), Rs 59,434 and Rs 53,889 on Thrissur and Kasargod district associations, respectively.

Besides, six office bearers have been slapped with a total fine of Rs 4.07 lakh.

Following a detailed probe by its investigation arm Director General, the regulator found that these entities violated competition norms with respect to mandating the requirement of no objection certificate (NOC) for appointment of new stockists by pharmaceutical companies.
 

This case once again highlights the persistent attempts of anti-competitive conduct by chemist and druggist associations. Despite various CCI orders in similar cases and wide publicity with respect to the NOC practice, the entities have not abstained from indulging in such practices, the CCI said.

"The Commission found that with a view to hide their apparent anti-competitive behaviour, these associations were insisting the NOC requirement through different nomenclatures," an official release said today.

In an order dated October 31, the Competition Commission of India (CCI) said the mandatory requirement of NOC as alleged by the informant parties in the present case, has been established by the evidence on record against AKCDA and its two district units.

The regulator also noted that the practice of mandating NOC prior to the appointment of stockists results in limiting and controlling the supply of drugs in the market, which amounts to anti-competitive practice.

"The Commission concludes that AKCDA and its district associations, namely, Thrissur and Kasargod, have contravened the provisions of Section 3... of the Act," CCI said.

Section 3 pertains to anti-competitive agreements.

Four individuals, including Sudeep PM, KA Sundaran and Giri Nair, had filed the complaint. Since the fourth person was granted confidentiality, the individual's identity has not been disclosed.