CCI imposes Rs 302 cr penalty on Grasim Industries
Besides, the company has been directed to "cease and desist" from indulging in anti-competitive practices as well as put in place a transparent "discount policy" for all the market participants.
In a 60-page order, the Competition Commission of India (CCI) said the company has abused its dominant position in the market for supply of VSF to spinners in India by charging discriminatory prices to its customers besides imposing supplementary obligations upon them.
These are in violation of competition norms, it added.
VSF is Viscose Staple Fibre (VSF) and is produced as well as sold by Grasim Industries.
The company has also been directed to "refrain from adopting unfair/ discriminatory pricing practices and also refrain from seeking the consumption details of VSF from the buyers", the order said.
Further, the watchdog has asked Grasim Industries to put in place a discount policy which is transparent and non-discriminatory to all the market participants, and to make it easily and publicly accessible/ available.
"It is made clear that OP-2 (Grasim Industries) shall not place any end-use restriction on the buyers of VSF and it would be open to them to use the same for spinning or trading or any other purpose, as permissible under law," the order said.
A penalty of Rs 301.61 crore has been imposed on the company, an amount that is equivalent to 5 per cent of its average turnover from the relevant market from 2014-15 to 2016-17. The market for supply of VSF to spinners in India is the relevant one.
A complaint alleging unfair business practices was filed against Association of Man Made Fibre Industry of India, Grasim Industries, Thai Rayon and Indo Bharat Rayon. The three companies are part of the Aditya Birla Group.
According to the Commission, Grasim Industries imposed supplementary obligations upon the spinners which by their very nature or according to commercial usage, have no connection with the subject of such contracts.