CCI imposes Rs 10 lakh fine on Goa's chemist association

The Competition Commission of India (CCI) has imposed penalty of Rs 10.62 lakhs on the Chemist and Druggists Association, Goa (CDAG) for indulging in anti-competitive practices. The Competition has found the CDAG to be in continued contravention of the provisions of the Competition Act, 2002. In an earlier case, the Competition Commission of India found CDAG to be in contravention of the Act and thereafter passed an order under section 27 of the Act on June 11, 2012 imposing a penalty of Rs 2 lakhs on CDAG.
 
“In a subsequent complaint filed by Xcel Healthcare, it was brought to the notice of the Commission that CDAG was restraining pharmaceutical companies such as Glenmark Pharmaceuticals Limited and Wockhardt Limited from doing business with non-authorised stockists and thereby not complying with the order of the Commission. The Commission took suo-moto cognisance and ordered the Director General to investigate the matter,” said a CCI press release.
 
Following detailed investigation, the commission found that CDAG was indulging in anti-competitive practices in complete disregard to CCI order dated June 11, 2012. It was found that CDAG was continuing to exercise control on the supply chain through which drugs and medicines are made available in the market through the practice of requirement of LOC/NOC prior to appointment of stockists by pharmaceutical companies without having any legal or statutory authority in this respect.
 
In addition, CCI also found that CDAG forced pharmaceutical companies to follow its mandate by threatening the other stockists in Goa to stop taking supplies or suspend receiving supplies from them till such time they stopped supplies to the unauthorised stockists such as Xcel Healthcare.
 
“Observing that the case involved continued contravention and utmost disrespect to the Commission’s earlier order, CCI imposed a penalty calculated at the rate of 10% of the average receipts of CDAG amounting to Rs 10.62 lakhs. The penalty is to be deposited within 60 days of receipt of the order,” added the release.