Jan 13, 2023

CCI Closes Case of Cartelisation, Against Agro-Commodity Companies

On October 13, 2022, the CCI closed a suo-moto case initiated against various agro-commodity companies for cartelisation, leading to an alleged increase in prices of pulses in 2015-16.[1]

Some opposite parties (‘OPs’) are leading agro-commodity companies with operations in procurement, warehousing, distribution, processing, and trading of agricultural products. The other opposite parties were alleged to be entry operators who provided bogus bills to the agro-commodity companies. One opposite party was an association of various regional associations of the pulses industry. It was alleged in an article that OPs procured and hoarded local pulses stock, besides helping offload the stocks, and the increase in prices of pulses in the year 2015–16 was a consequence of the formation of cartels by OPs.

In its prima facie order, the CCI had noted that the production of pulses in the alleged period had significantly fallen and the fall in supply was matched by increase in import and followed by an abnormal increase in the price of pulses. Thus, the CCI directed the DG to investigate into the allegations. The DG found that there was an abnormal increase in prices, and there was collusion among the OPs that shared sensitive commercial information. The DG also found some OPs in a collusive arrangement of supply of accommodation entries.

However, the CCI observed that the DG investigation did not point towards any price parallelism amongst OPs. The investigation also did not analyse the role of global prices in determining domestic prices, and the DG did not analyse the nature of trade carried out by importers and whether such information regarding stock positions is available to the public and to all competitors and buyers in the market before finding a violation of the Competition Act. The CCI held that exchanging information available in public domain is not construed as collusion. Since the OPs potentially used same brokers/agents/intermediaries for sale of pulses, this dealing may result in transparency and organic dissemination of information in the market. There was no sufficient evidence to establish cartelisation in the present case. Thus, the CCI held that no case of contravention to Section 3 of the Competition Act was made out and thus dismissed the allegations against the agro-commodity companies.


[1] Suo Moto Case No. 04 of 2018.




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