CCI imposes Rs 1 cr fine on Uttarakhand Agricultural Produce Marketing Board

Garhwal Mandal Vikas Nigam Ltd and Kumaun Mandal Vikas Nigam Ltd were appointed as the exclusive sub-wholesalers and they ceased to be sub-licensees in 2016.The board was discharged from all responsibilities of dealing with the procurement of alcoholic beverages in the state in 2016, the regulator noted in the order.

Competition Commission of India (CCI) has imposed a fine of Rs 1 crore on Uttarakhand Agricultural Produce Marketing Board for abusing its dominant position with respect to wholesale procurement and distribution of alcoholic beverages in Uttarakhand.

The watchdog has also directed the board to deposit the fine within 60 days as well as ''cease and desist'' from indulging in anti-competitive practices.

A detailed investigation was carried out into the case. The regulator had ordered the probe in 2016.

In an order passed on Tuesday, the regulator said the Uttarakhand Agricultural Produce Marketing Board being the exclusive FL-2 wholesale licensee had indulged in procurement of alcoholic beverages from manufacturers in an arbitrary manner resulting in denial of market access.

Also, the board had entered into agreements with certain members of ISWAI which had one-sided and unfair clauses.

The order came on a complaint filed by a representative body of the International spirits and wines companies, International Spirits and Wines Association of India (ISWAI) against Uttarakhand Agricultural Produce Marketing Board, Garhwal Mandal Vikas Nigam Ltd and Kumaun Mandal Vikas Nigam Ltd.

According to the regulator, the arbitrary and capricious procurement undertaken by the board had led to an increase in sales of brands of some manufacturers as well as to a steep decline in the sales of others.

The implementation of the excise policy in an inappropriate manner by the entity led to some brands/ players attaining an undue advantage over others and harming the sales of others thereby distorting the competition in the market, it noted.

''The arbitrary action of OP-1 led to a situation where the preferences of the end consumers were not taken into account while placing purchase orders of certain brands of alcoholic beverages, thereby distorting the market to the detrimental of manufacturers of certain brands of alcoholic beverages ... The Commission, therefore, holds that the unilateral conduct of OP-1 impacted the inter-brand competition of the brands of IMFL being sold in the State of Uttarakhand,'' the order said.

OP-1 refers to Uttarakhand Agricultural Produce Marketing Board.

As per a liquor wholesale order passed in 2015, Uttarakhand Agricultural Produce Marketing Board was an exclusive wholesale licensee for foreign liquor/beer/wine, including Indian Made Foreign Liquor (IMFL) in the state. Garhwal Mandal Vikas Nigam Ltd and Kumaun Mandal Vikas Nigam Ltd were appointed as the exclusive sub-wholesalers and they ceased to be sub-licensees in 2016.

The board was discharged from all responsibilities of dealing with the procurement of alcoholic beverages in the state in 2016, the regulator noted in the order.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)