New Delhi: A probe has been ordered against Asian Paints by the Competition Commission of India (CCI) to see whether the company had hindered the operations of JSW Paints in certain South Indian states by making use of its dominant position.
JSW is part of industrialist Sajjan Jindal managed JSW Group. JSW painst had approached the CCI with its complaint that Asian Paints had threatened dealers in some states like Tamil Nadu, Telangana and Karnataka.
The CCI found enough merit in the complaint of JSW Paints to order such a probe. “The Commission is of the view that evidence provided by JSW Paints is prima-facie sufficient to indicate that Asian Paints has denied access to the distribution channels in the relevant market to JSW Paints,” said CCI.
The CCI said that there is a prima-facie case against Asian Paints that it acted in contravention of the rules in the Competition Act.
JSW Paints had said in its complaint to the CCI that Asian Paints had threatened dealers in the three states with punitive action. It alleged that Asian Paints had threatened to cut off supplies to the dealers and discounts if they kept JSW Paints stock in their shops.
The complaint also said that Asian Paints has been using its dominant position for many years and there has been no new paint company in the country which has been able to establish itself in the past 10 years.
The CCI noted that threatening dealers not to deal with any particular paint company or companies can create lot of pressure for the paint supplying company.
In light of the order of CCI probe, Asian paints said in a regulatory filing “The company is currently examining the order and will take appropriate legal recourse and will extend full cooperation to CCI in the matter.”