CCI orders probe against Asian Paints for alleged abuse of dominant position

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The Competition Commission of India (CCI) has ordered its director general (DG) to investigate allegations of abuse of market dominance by paint maker Asian Paints. This investigation has been ordered following compliant raised by Grasim Industries, which is a new entrant into the paint market through Birla Paints, an official order dated July 1 showed. In the complaint, Birla Paints has also accused Asian Paints was putting restrictive clauses with its distributors discouraging them from selling products of Birla Paints.

The informant company also added that some of the dealers who are entering into exclusive arrangements with Asian Paints are being specially rewarded by offering special discounts, sponsoring foreign trips etc. On the other hand, dealers who are selling Birla Paints along with Asian Paints are being targeted by Asian Paints through reducing credit limit, enhancing sales targets and reducing consumer leads.

“From the aforesaid material placed on record by the Informant, it appears that the OP is restraining third parties like suppliers of essential raw materials, warehousing landlords, C&F Agents and Transporters, from engaging with the Informant, which prima facie leads to input foreclosure for the Informant amounting to denial of market access to competitors like the Informant, in contravention of the provisions of Section 4(2)(c) of the Act.” CCI quorum lead by its chair Ravneet Kaur said in the order dated July 1.

According to Centre for Monitoring Indian economy (CMIE) data, Asian Paints was the largest paint company in the country with a market share of 39.05% in FY23. Berger Paints was distant second with market share of 12.13% while Kansai Nerolac Paints and Akzo Nobel India were third and fourth with market share less than 10% each, respectively.