CCI imposes Rs 302 cr penalty on Grasim Industries, Retail News, ET Retail

New Delhi: The Competitiveness Fee has slapped a penalty of Rs 302 crore on Grasim Industries for abusing its dominant placement with regard to supply of a sure staple fibre to spinners.

Moreover, the firm has been directed to “stop and desist” from indulging in anti-aggressive techniques as nicely as place in spot a clear “price cut coverage” for all the market participants.

In a sixty-web page purchase, the Competitiveness Fee of India (CCI) explained the firm has abused its dominant placement in the market for supply of VSF to spinners in India by charging discriminatory selling prices to its customers, in addition to imposing supplementary obligations on them.

These are in violation of level of competition norms, it additional.

VSF is Viscose Staple Fibre (VSF) and is created as nicely as bought by Grasim Industries.

“Even though the firm is still to get the purchase of the CCI, it thinks that on deserves it has sufficient grounds for an appeal,” the firm explained in a submitting to the inventory exchanges on Monday.

The CCI has directed the firm to “refrain from adopting unfair/discriminatory pricing techniques and also refrain from trying to get the intake particulars of VSF from the purchasers”.

Further, the watchdog has asked Grasim Industries to place in spot a price cut coverage which is clear and non-discriminatory to all the market participants, and to make it effortlessly and publicly obtainable/offered.

“It is made obvious that OP-two (Grasim Industries) shall not spot any stop-use restriction on the purchasers of VSF and it would be open to them to use the exact same for spinning or investing or any other objective, as permissible below legislation,” the purchase explained.

A penalty of Rs 301.61 crore has been imposed on the firm, an total that is equivalent to 5 for every cent of its regular turnover from the appropriate market from 2014-fifteen to 2016-seventeen. The market for supply of VSF to spinners in India is the appropriate one particular.

A criticism alleging unfair business techniques was filed from Association of Gentleman Manufactured Fibre Sector of India, Grasim Industries, Thai Rayon and Indo Bharat Rayon. The three corporations are portion of the Aditya Birla Team.

In accordance to the Fee, Grasim Industries imposed supplementary obligations on the spinners which by their very nature or according to industrial use, have no link with the issue of these contracts.

“… the Fee has no hesitation in holding that OP-two has abused its dominant placement in the appropriate market as a substitute of behaving as a liable company citizen which is predicted to comply with the specific and differential obligations of a dominant enterprise,” it pointed out.