E-Malt.com News article: India: Complaint against SABMiller India rejected by fair trade watchdog

Fair trade watchdog Competition Commission of India has rejected a complaint of alleged anti- competitive practices against beer maker SABMiller India, Economic Times reported on June, 5.

Hyderabad-based Official Beverages, a manufacturer of soda and packaged drinking water, had alleged that SABMiller was abusing its dominant positions besides forming a cartel that hurt the business interests of the complainant.

Rejecting the plea of Official Beverages, which had a franchise pact with SABMiller, CCI said the "dispute between the parties was business/commercial dispute regarding implications of the franchisee agreement".

Observing that there is no prima facie evidence for further investigation on the complaint, the regulator in an order dated May 31 said, "No competition issue arises in this case".

Under the franchise agreement with SABMiller, Official Beverages was to manufacture packaged drinking water, sparkling water and packaged soda with the former's trademark.

The pact, signed in March 2009, was valid for three years, but it was terminated in February 2012. Official Beverages has alleged that terms were completely one sided and favoured the beer maker.

After the pact was terminated, the complainant said that SABMiller along with 12 other clearing and forwarding agents withheld the sale consideration. The 12 entities were agents for the products manufactured by Official Beverages, under the SABMiller trademark.

As per the complaint, "all the opposite parties formed a cartel and boycotted the business of the informant causing irreparable loss to it".

Besides, it alleged the contract was terminated in February, 2012 by SABMiller, before the stipulated period, and that after the termination, all the entities concerned withheld the sale consideration.

CCI observed that Official Beverages had many options besides SABMiller, as many players were active in the field of selling packaged drinking water and soda.

"It cannot be said that Opposite Party-1 (SABMiller) had no competitors and therefore was able to operate independent of competition," the regulator said and added that the issue of dominance would not arise in a franchisee agreement of this nature.


06 June, 2013