Competition watchdog slaps Rs 870 crore fine on top beer companies for cartelisation

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The Competition Commission of India (CCI) has passed a final order against three beer companies, namely United Breweries Limited (UBL), SABMiller India Limited (now renamed as Anheuser Busch InBev India Ltd.) and Carlsberg India Private Limited (CIPL) for indulging in cartelisation in the sale and supply of beer in various States and Union Territories in India, according to an official statement issued on Friday.</p>
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The CCI directed UBL and CIPL to pay penalties of Rs 750 crore and Rs 120 crore respectively, besides passing a cease-and-desist order. The beer companies were also given the benefit of reduction in penalties under the provision of section 46 of the Competition Act which in the case of SabMiller worked out to 100%, the statement explained.</p>
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All India Brewers’ Association (AIBA) was also found to be actively involved in facilitating such cartelisation in contravention of the provisions of Competition Act.</p>
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The period of the cartel was held to be from 2009 to at least October 10, 2018 when the authorities conducted search and seizure operations at the premises of the beer companies.</p>
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Based on evidences of regular communications between the parties collected by the authorities during search and seizure, and on the basis of the disclosures made in the lesser penalty applications, CCI found that the three companies engaged in price co-ordination in contravention of the provisions of the Competition Act in the States of Andhra Pradesh, Karnataka, Maharashtra, Odisha, Rajasthan, West Bengal, National Capital Territory of Delhi and the Union Territory of Puducherry.</p>
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The cartel was found to have collectively restricted supply of beer in the States of Maharashtra, Odisha and West Bengal in contravention of the provisions of the law and in sharing of market in the State of Maharashtra as well as co-ordination with respect to supply of beer to premium institutions in Bengaluru.</p>
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CCI also found co-ordination amongst UBL and AB InBev with respect to purchase of second-hand bottles. Further, 4 individuals of UBL, 4 individuals of AB InBev, 6 individuals of CIPL and the Director General of AIBA, were held by CCI to be liable for the anti-competitive conduct of their respective companies/ association, in terms of Section 48 of the Act.</p>
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