Rs 55.42 lakh CCI penalty slapped on Ferozepur based Chemists and Druggists Association
Updated: Feb 07, 2014 03:46:51pm
New Delhi, Feb 7 (KNN) In a ruling with wide implications for the retail trade in pharmaceutical and other sectors, the Competition Commission of India (CCI) has slapped a penalty of Rs 55.42 lakh on the Chemists and Druggists Association, Ferozepur (CDAF) in Punjab and its office bearers for violating the Competition Act and restricting the competition in the trade.
“Penalty has been imposed on the basis of information filed by M/s Arora Medical Hall, Ferozepur alleging contravention of the provisions of Competition Act,” Ministry of Corporate Affairs said in a release today.
The Commission has imposed the penalty on the basis of 10 per cent of the average income/receipts on the Association and its office bearers amounting to a total of Rs 55.42 lakhs.
CCI has also directed CDAF and its office bearers to “Cease and Desist” from indulging in such anti-competitive practices. The Commission also directed CDAF to file undertakings to this effect within a period of 30 days from the date of receipt of the order.
The informant had alleged that the CDAF had imposed conditions to take an NOC and Letter of Credit from the CDAF, the release added.
Further, CDAF directed its members to stop purchasing goods from the informant vide their resolution on May 26, 2012 and directed all the wholesalers to stop dealings with the retailers who continued to purchase goods from the informant.
“The informant alleged that such actions were creating barriers to new entrants in the market but also driving existing competitors out of the market,” the release said.
After a detailed investigation, CCI came to the conclusion that the acts of the CDAF were anti-competitive and the conduct needs to be penalized to act as a deterrent in future for any other association/office bearer who engaged in such type of actions.
The Commission directed the opposite parties to deposit the penalty amount within the 60 days of receipt of the order.
CCI has been issuing notice for the chemist associations and the drug manufacturing industry to desist from unfair trade practices and that non-compliance of this order would involve severe penalties, even leading to prosecution.
According to a CCI notification, the Commission found certain practices in cases of associations of chemists, druggists, stockists, whole-sellers and manufacturers at All India level, State level and District level as anti-competitive.
The CCI notification said that, “Issuance of No Objection Certificate or letter of consent by such associations for opening chemist shop/being appointed stockists/distributor/whole-seller,” will be considered anti-competitive. (KNN/SD)
“Penalty has been imposed on the basis of information filed by M/s Arora Medical Hall, Ferozepur alleging contravention of the provisions of Competition Act,” Ministry of Corporate Affairs said in a release today.
The Commission has imposed the penalty on the basis of 10 per cent of the average income/receipts on the Association and its office bearers amounting to a total of Rs 55.42 lakhs.
CCI has also directed CDAF and its office bearers to “Cease and Desist” from indulging in such anti-competitive practices. The Commission also directed CDAF to file undertakings to this effect within a period of 30 days from the date of receipt of the order.
The informant had alleged that the CDAF had imposed conditions to take an NOC and Letter of Credit from the CDAF, the release added.
Further, CDAF directed its members to stop purchasing goods from the informant vide their resolution on May 26, 2012 and directed all the wholesalers to stop dealings with the retailers who continued to purchase goods from the informant.
“The informant alleged that such actions were creating barriers to new entrants in the market but also driving existing competitors out of the market,” the release said.
After a detailed investigation, CCI came to the conclusion that the acts of the CDAF were anti-competitive and the conduct needs to be penalized to act as a deterrent in future for any other association/office bearer who engaged in such type of actions.
The Commission directed the opposite parties to deposit the penalty amount within the 60 days of receipt of the order.
CCI has been issuing notice for the chemist associations and the drug manufacturing industry to desist from unfair trade practices and that non-compliance of this order would involve severe penalties, even leading to prosecution.
According to a CCI notification, the Commission found certain practices in cases of associations of chemists, druggists, stockists, whole-sellers and manufacturers at All India level, State level and District level as anti-competitive.
The CCI notification said that, “Issuance of No Objection Certificate or letter of consent by such associations for opening chemist shop/being appointed stockists/distributor/whole-seller,” will be considered anti-competitive. (KNN/SD)
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