Denying market access to Indian made foreign liquor producers by licensee of foreign liquor was an abuse of dominance

Case details: International Spirits and Wines Association of India (ISWAI) v. Uttarakhand Agricultural Produce Marketing Board - [2021] 129 taxmann.com 189 (CCI)

Judiciary and Counsel Details

• • Ashok Kumar Gupta, Chairperson Ms. Sangeeta Verma and Bhagwant Singh Bishnoi, Member
  • Amit Sibal, Sr. Adv., Ms. Nisha Kaur Uberoi, Gautam Chawla, Mathew George, Advs. and Rajiv Chauhan for the Appellant.
  • Rahul Narayan, Karan Chandhiok, Ms. Shruthi Rao, Shashwat Goel, Vijay Kumar, Kailash Pandey, Ms. Lagna Panda and Salman Qureshi, Advs. for the Respondent.

Facts of the Case

The present case has been initiated based on information filed under the provisions of Section 19(1)(a) of the Competition Act, 2002 by International Spirits and Wines Association of India (‘Informant’) against Uttarakhand Agricultural Produce Marketing Board (‘OP-1’), Garhwal Mandal Vikas Nigam Ltd. (‘OP-2’) and Kumaun Mandal Vikas Nigam Ltd. (‘OP-3’) (collectively referred to as ‘OP’), alleging contravention of the provisions of Section 4 of the Act.

In the instant case, the State of Uttarakhand, through its Chief Secretary, issued a Liquor wholesale order granting exclusivity of operations to the OP with respect to procurement and distribution of foreign liquor/beer/wines (alcoholic) beverages including Indian Made Foreign Liquor (IMFL),

However, the Informant, a representative body of international spirits and wine companies in India had alleged that OP was placing orders with alcoholic beverage manufacturers for supply of IMFL in an arbitrary and discriminatory manner with no relation to consumer demand.

Further, OP was not procuring beverages of certain brands of members of informant namely, Pernod and USL, despite demonstrably high consumer demand and thereby discriminating against manufacturers of these beverages. It was also alleged that OP was not maintaining minimum stock levels.

CCI Held

Since, OP was the only route to access the market for alcohol manufacturers on account of sole rights of procurement and distribution vested under Liquor Wholesale Order, impugned conduct of OP was in violation of section 4 of the CCI Act. In light of the above facts and circumstances, the penalty of Rupees One Crore was to be imposed on OP.

List of Cases Referred to

• • Ashish Ahuja v. Snapdeal.com [Case No. 17 of 2014] (para 59)
  • Surinder Singh Barmi v. Board of Control for Cricket in India [2017] 87 taxmann.com 336 (CCI) (para 62)
  • United Breweries Ltd. v. Commissioner, Department of Excise [2019] 109 taxmann.com 188 (CCI) (para 64)
  • Khoday Distilleries Ltd. v. State of Karnataka [1995] 1 SCC 574 (para 60)
  • Global Tax Free Traders v. William Grant and Sons Ltd. [2014] 43 taxmann.com 144/124 SCL 329 (CCI) (para 72)
  • United Spirits Ltd. [Combination Registration No. C-2012/12/97] (para 72)
  • Mohit Manglani v. Flipkart India (P.) Ltd. [2015] 57 taxmann.com 57/131 SCL 18 (CCI) (para 72)
  • National Stock Exchange of India Ltd. v. CCI [Appeal No. 15 of 2011] (para 75)
  • Belaire Owner’s Association v. DLF Ltd. [2011] 14 taxmann.com 90/109 SCL 655 (CCI) (para 81)
  • CCI v. Bharti Airtel Ltd. [2019] 2 SCC 521 (para 92)
  • CCI v. Fast Way Transmission (P.) Ltd. [2018] 92 taxmann.com 243/147 SCC 198 (SC) (para 129)
  • Cochin Port Trust v. Container Trailer Owners Co-ordination Committee [2017] 84 taxmann.com 276 (CCI) (para 139).