The Competition Commission of India (CCI) has directed an investigation into Asian Paints Ltd. for alleged abuse of dominant position in the decorative paints market. The directive follows a complaint lodged by Grasim Industries Ltd., part of the Aditya Birla Group, alleging exclusionary and anti-competitive conduct aimed at impeding market access for new entrants.
Grasim Industries, which entered the decorative paints segment under the brand ‘Birla Opus’ in February 2024, alleged that Asian Paints, India’s largest paint manufacturer, has engaged in exclusionary practices. According to the complainant, Asian Paints holds approximately 53% of the country’s installed paint production capacity and operates through a vast distribution network comprising over 74,000 dealers and 1.6 lakh touchpoints.
The complaint accused Asian Paints of employing incentives such as foreign trips and enhanced discounts to dealers in exchange for exclusivity. Additionally, it was alleged that Asian Paints imposed increased sales targets on dealers who engaged with Birla Opus products and exerted pressure on landlords, transporters, and C&F agents to prevent any association with Grasim. These actions, according to the complainant, impeded market access for new entrants like Birla Opus.
At the prima facie stage, the Commission held that “Asian Paints has been imposing unfair conditions upon them (dealers), which is found to be in the nature of exploitative conduct.” It further noted that “by restraining suppliers of essential raw materials from providing goods and services to the competitors like Grasim, as well as by coercing landlords, C&F agents and transporters to refrain from engaging with competitors like Grasim, Asian Paints seems to be prima facie creating barriers to new entrants in the market as well as partially foreclosing competition in the market.”
Clarifying the procedural posture, the CCI stated, “The Commission directs the Director General (‘DG’) to cause an investigation to be made into the matter and submit an investigation report within a period of 90 days of the receipt of the present order. At this prima facie stage, the Commission, in light of the material available on record, finds no reason to hear the OP before passing the present order.” The regulator also emphasised that “observations made herein are not the final expression of opinion on the merits of the case,” and directed the DG “to conduct the investigation without being swayed in any manner whatsoever by the observations made herein.”
Pursuant to its prima facie satisfaction, the Commission has ordered the Director General to undertake a comprehensive investigation into the alleged anti-competitive conduct of Asian Paints and submit a report within 90 days. The matter now awaits the findings of the investigative authority, which will determine the further course of proceedings.
Asian Paints, in a stock exchange disclosure, confirmed receipt of the order and stated that it is “currently reviewing the order and will take appropriate legal recourse.” It further assured that the company “remains committed to fully cooperating with the CCI during the course of the investigation.”
This is not the first time Asian Paints has faced scrutiny under competition law. A similar complaint by JSW Paints in 2022 was dismissed by the Commission. However, the present matter marks a renewed inquiry, with the CCI finding prima facie merit in the allegations brought forth by Grasim Industries.
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