asian paints: CCI finds no violation of competition law by Asian Paints – Blue Barrows

Asian Paints, the country’s most valued paints company, was cleared of allegations relating to anti-competitive trade practices by the competition watchdog that had probed a JSW Paints complaint.

In its report dated September 8, the Competition Commission of India (CCI) said it probed allegations of anticompetitive practices against the decorative paints market leader. Upon investigation, it concluded that the actions of

were “based on objective criteria and uniformly applicable practice of Asian Paints to protect its business interest.”

JSW Paints, a unit of the steel-to-cement JSW Group, is a recent entrant into the decorative paints market where Asian Paints holds about 40% share. The company had alleged in 2020 that Asian Paints was using its dominant position in the market to block its entry into the states of Karnataka, Telangana and Tamil Nadu.

The complaint said that Asian Paints reduced the credit limit and tier of several dealers in these states following their dealings with JSW Paints. It was also alleged that the dominant player threatened to stop business with such dealers and forced them to discard or less-prominently display the promotional material of the complainant.

“The facts and circumstances of the case and based on evidence on record, (the CCI) notes that the investigation has returned a finding that the reduction in credit limit in almost all cases of dealers would have been necessitated on account of business considerations, either due to reduction in off-take by the dealer concerned or on account of unpaid accumulated overdue over a period, which is stated to be as per a laid down policy of Asian Paints,” said the watchdog’s report.

Similarly, the competition watchdog found that the retail tiers of dealers were restored prior to the filing of information in the case. The report stated that Asian Paints did not pressurise or influence any dealer to remove the JSW promotional material or tinting machines.

The competition watchdog said that a letter submitted by a dealer alleging coercion on the part of Asian Paints was obtained by JSW Paints without giving the dealer the true context and that the same dealer later dismissed the allegations against Asian Paints in an affidavit.