Competition Commission of India
In Re: Alleged Anti-Competitive ... vs Unknown on 24 September, 2021
COMPETITION COMMISSION OF INDIA
Suo Motu Case No. 06 of 2017
In Re: Alleged anti-competitive conduct in the Beer Market in India
Against:
1. United Breweries Limited
2. Crown Beers India Private Limited (now a wholly owned subsidiary of Anheuser
Busch InBev SA/NV)
3. SABMiller India Limited (now renamed as Anheuser Busch InBev India Ltd. after
being acquired by Anheuser Busch InBev SA/NV)
4. Carlsberg India Private Limited
5. All India Brewers' Association
CORAM
Ashok Kumar Gupta
Chairperson
Sangeeta Verma
Member
Bhagwant Singh Bishnoi
Member
Present:
Mr. Amit Sibal, Senior Advocate alongwith
Mr. Ravishekhar Nair, Ms. Avantika Kakkar,
Mr. Sahil Khanna, Mr. Abhay Joshi, Mr.
For United Breweries Ltd. (UBL), Mr. Kirthi Srinivas, Mr. Ambar Bhushan, Mr.
Kalyan Ganguly of UBL, Mr. Kiran Kumar Saksham Dhingra, Mr. Animesh Kumar, Ms.
of UBL, Mr. Perry Goes of UBL and Mr. Shreya Joshi and Ms. Sree Ramya Hari,
Shekhar Ramamurthy of UBL: Advocates and Mr. Govind Iyengar, Senior
VP Legal of UBL, Mr. Kiran Kumar in
person, Mr. Perry Goes in person and Mr.
Shekhar Ramamurthy in person
Mr. Ramji Srinivasan, Senior Advocate
For Mr. Shalabh Seth of UBL: alongwith Mr. Gaurav Desai, Ms. Apurva
Badoni and Mr. Shivkrit Rai, Advocates
Suo Motu Case No. 06 of 2017 1
Mr. Prashanto Chandra Sen, Senior Advocate
alongwith Ms. Nisha Kaur Oberoi, Mr.
For Mr. Steven Bosch of UBL:
Gautam Chawla, Mr. Rishabh Juneja and Ms.
Shambhavi Sinha, Advocates
Mr. Manas Kumar Chaudhari, Mr. Pranjal
For Anheuser Busch InBev SA/NV (i.e., Prateek, Mr. Sagardeep Rathi and Ms.
Crown Beers India Private Limited and Radhika Seth, Advocates alongwith Ms. Ajita
SABMiller India Limited): Pichaipillai, Legal and Compliance Director
of AB InBev
For Mr. Anil Arya of SABMiller India Ltd.: Mr. Talha Abdul Rahman, Advocate
For Mr. Nilojit Guha of SABMiller India Mr. Tahir Ashraf Siddiqui, Advocate with
Ltd.: Mr. Nilojit Guha in person
For Mr. S. Diwakaran of SABMiller India
Mr. Shreyas Mehrotra, Advocate
Ltd.:
For Carlsberg India Pvt. Ltd. (CIPL), Mr. Mr. Rajshekhar Rao, Ms. Manika Brar, Ms.
Anil Bahl of CIPL, Mr. Dhiraj Kapur of Atrayee Sarkar, Mr. Anandh Venkataramani,
CIPL, Mr. Mahesh Kanchan of CIPL, Mr. Mr. Nilav Banerjee, Ms. Kajori De, Ms.
Michael Jensen of CIPL and Mr. Nilesh Afreen Abbassi and Ms. Raveena Sethia,
Patel of CIPL Advocates alongwith Mr. Amit Sethi of CIPL
Ms. Deeksha Manchanda and Mr. Shruti Rao,
For Mr. Pawan Jagetia of CIPL:
Advocates
For All India Brewers' Association (AIBA): Mr. Subodh Prasad Deo and Ms. Rinki Singh,
For Mr. Sovan Roy of AIBA: Advocates, with Mr. Sovan Roy in person
ORDER UNDER SECTION 27 OF THE COMPETITION ACT, 2002
Facts:
1. The present matter was initiated by the Commission suo motu, pursuant to the filing of
an application dated 26.07.2017 under Section 46 of the Competition Act, 2002 (the
'Act') read with Regulation 5 of the Competition Commission of India (Lesser Penalty)
Regulations, 2009 ('LPR') by Crown Beers India Private Limited ('OP-2') and
SABMiller India Limited ('OP-3'), both ultimately held by Anheuser Busch InBev
SA/NV ('Ab InBev'), against the captioned parties ('OPs'), for alleged cartelisation in
relation to the production, marketing, distribution and sale of Beer in India.
2. From the disclosures made in the lesser penalty application, the Commission noted that
there appears to exist collusion amongst OP-2 and OP-3, along with United Breweries
Limited ('OP-1') and Carlsberg India Private Limited ('OP-4'), to (i) align the prices of
Suo Motu Case No. 06 of 2017 2
Beer and (ii) seek/implement price adjustments in several States and Union Territories
('UTs') of India, irrespective of whether the model of distribution of alcohol (including
Beer) therein was of corporation market, auction market or free market. The aim of the
companies appears to be to ensure consistency in their pricing policies, in particular,
price increases and to achieve this aim, OP-1 to OP-4 appears to have co-ordinated by
way of a series of multilateral and bilateral meetings and e-mail exchanges amongst
themselves as well as through the common platform of the All India Brewers'
Association ('OP-5'). The Commission also noted that the period of such co-ordination
between the OPs appears to be from as early as March 2005 till at least March 2017, and
perhaps beyond.
3. Noting the above, the Commission passed an order dated 31.10.2017 under Section 26(1)
of the Act, forming an opinion that prima facie, the conduct of the OPs appears to be in
contravention of the provisions of Section 3(1) read with Section 3(3)(a) of the Act, and
consequently, directed the Director General ('DG') to cause an investigation into the
matter and submit a report.
4. During investigation, the DG conducted search and seizure operations on the premises of
the OPs on 10-11.10.2018.
5. Thereafter, applications under Section 46 of the Act read with Regulation 5 of the LPR
were filed by OP-1 on 12.10.2018, by OP-4 on 15.10.2018, by Mr. Steven Bosch, Chief
Financial Officer and Executive Director of OP-1, on 17.10.2018 and by Mr. Shalabh
Seth, Chief Supply Officer at OP-1, former Managing Director of OP-3 and former
Chairman of OP-5, on 08.01.2019.
Findings of the DG:
6. On 28.06.2019, the DG submitted the confidential version of its investigation report, and
on 15.11.2019, the DG submitted the non-confidential qua OPs' version ('NCV qua
OPs') of its investigation report. Thereafter, on 03.03.2020, the DG submitted the
revised NCV qua OPs investigation report.
Suo Motu Case No. 06 of 2017 3
7. With respect to the working of the Beer industry in India, the DG observed that, in India,
the manufacture, production, possession, transport, purchase and sale of intoxicating
liquors, including Beer, falls within the ambit of Item No. 8 in List II of the Seventh
Schedule of the Constitution of India (i.e., the State List). Further, as per Item No. 51 of
the State List, duties of excise on liquor is also a State subject. Furthermore, the DG
noted that the sale of liquor (including Beer) does not fall within the ambit of the Goods
and Services Tax ('GST'). As such, each State/UT in India has its own unique method of
regulating the sale of liquor (including Beer) within its territory, leading to differences in
pricing regulations and approvals, imposition of different taxes, different excise duties
and differing terms of licensing, among others.
8. The DG observed that across India, different States and UTs follow anyone of the
following four major route-to-market models for the distribution and sale of Beer:
(a) Corporation Model: The State Government runs the business through a separate public
sector company/corporation, which is fully owned by the State Government. This
monopoly corporate entity controls the pricing, distribution and retail of alcohol
(including Beer). The Corporation procures Beer from the manufacturers, either
directly or through an agency, by floating annual tenders, then sells it to consumers
through a distribution network. This distribution network could comprise of retail shops
owned by Government or by private retailers or a mix of the two. This is the model of
distribution of alcohol prevalent in the States of Andhra Pradesh, Chhattisgarh,
Himachal Pradesh (till 31.03.2018), Karnataka, Kerala, Madhya Pradesh, Odisha,
Rajasthan, Tamil Nadu, Telangana, West Bengal (from 31.03.2018) and Jharkhand (till
31.03.2019) and the UT of Dadra & Nagar Haveli. Pricing in these States/UTs tends to
be heavily regulated.
(b) Auction Market Model: In this model, the relevant State Excise Authorities auction the
right to sell liquor (including Beer) in a particular geographical territory to an
individual/company on an annual basis. The successful bidders distribute the products
through retail outlets which are owned either by such bidders themselves or by other
private parties licensed to sell liquor products by the State Excise Authority. The Beer
manufacturers get the wholesale as well as retail prices of their products approved from
Suo Motu Case No. 06 of 2017 4
the State Excise Department. For this, they are required to submit cost cards which
include Ex-Brewery Price ('EBP') and the implication of relevant taxes and duties in
such States. The terms of sale are executed between the manufacturer and successful
bidder(s). The Beer manufacturers sell to the licensed outlets/wholesalers, and then the
wholesalers sell to the retailers. This model of distribution is followed in Haryana,
Punjab, Uttar Pradesh (till 31.03.2018) and Jharkhand (from 01.04.2019).
(c) Open/Free Market Model: In this model, beer manufacturers have private distributors,
and these distributors, in turn, sell to private retailers. The manufacturers are required to
declare the Maximum Retail Price ('MRP') and get the same approved by the relevant
Government Department. However, Beer manufacturers have substantial freedom in
fixing the MRPs of their Beer. This model is followed in Arunachal Pradesh, Assam,
Goa, Himachal Pradesh (from 01.04.2018), Jammu & Kashmir, Maharashtra,
Meghalaya, Mizoram, Sikkim, Tripura, Uttar Pradesh (from 04.04.2018), Uttarakhand,
West Bengal (till November 2017) and the UTs of Andaman & Nicobar, Chandigarh,
Daman & Diu and Puducherry.
(d) Hybrid Model: This distribution market has features of both Corporation and Open
Market. The State Government forms its own Corporation to procure and distribute
liquor products in the territory. It also grants open licences to wholesalers and retailers
to sell the product within the State. The hybrid model is currently being followed in the
National Capital Territory ('NCT') of Delhi only, where prices of different liquor
products for supply to the Corporations are fixed by the Delhi Government based on the
lowest price in neighbouring states. 60% of distribution and retail outlets in Delhi are
controlled by the four Corporations created by the State Government, and the remaining
40% of distribution and retail outlets are held by private entities.
9. As per the DG, irrespective of the type of distribution market, State Governments play a
key role in setting the Excise duties and retail prices of Beer. Given such a regulated
nature of the Beer industry, any change in the price of Beer has to be gotten approved
from the State Government. Hence, in all marketing models, the price increase proposals
are put forth by the Beer companies, then accepted by the State Government. Beer
manufacturing companies are required to periodically submit their cost cards setting out
Suo Motu Case No. 06 of 2017 5
the costs of production and sales for each stock keeping unit ('SKU') and brands to the
Excise Authorities of respective State. Pursuant to such review, the respective cost cards
(including details such as EBP, Promotional costs, if any, etc.) are approved by State
Excise Authorities. Besides, in certain States, the wholesaler and retailer profit margins
are also fixed by Government Authorities. Thus, the EBP, applicable Excise duties,
taxes, various types of fees, and wholesalers' and retailers' margin form part of the MRP
of Beer to be sold in a particular State. Since the taxation of Beer falls within the taxation
powers of the respective State, export fees are levied on any product exported out of the
State, in addition to the Excise duty payable on such a product. Similarly, import fees are
levied by the State to which the product manufactured in another State is transported for
sale. Thus, the EBP/Landing Cost/cost cards submitted by the Beer manufacturers to the
Government are crucial to determine the overall price of Beer and the profitability of the
Beer manufacturers.
10. The EBP of Beer declared by Beer companies in their cost cards is the initial base figure
for the calculation of the corporation/bidder's purchase price (Landed Cost), Government
taxes and levies and wholesalers' and retailers' margin. Since the rates of government
taxes and levies, wholesalers' margin and the retailers' margin are worked out on the
basis of percentage, the EBP of Beer can also be calculated by taking MRP as the base
and doing reverse calculation. The desired MRP inserted in the formula-based cost card
will back-calculate the EBP, which the brewer then submits in the tender/price increase
applications. Thus, Beer companies may either seek higher EBP fixation by the State
Government or ask for higher MRP and align their EBP to it through reverse calculation.
11. In the above scenario, based on the evidences collected during search and seizure
operations, including recording of statements on oath of key persons of the OPs, replies
received to the notices issued under Section 41(2) read with Section 36(2) of the Act,
information collected from the public domain, etc., the DG delineated the following two
issues for investigation and gave its findings in its investigation report as under:
(1) Whether the OPs indulge in cartelisation in the domestic Beer market in India in
contravention of the provisions of Section 3 of the Act?
Suo Motu Case No. 06 of 2017 6
(i) Corporation Markets - The documents collected during the investigation reveal that,
in certain States where the Corporation Model of distribution of liquor is followed
(Andhra Pradesh, Odisha, Karnataka, Rajasthan and West Bengal), OP-1, OP-3 and
OP-4 had been in regular contact with each other prior to submitting their bids to the
Corporations and even while seeking price revisions in EBP and MRP of their Beer
variants offered for sale to the Corporations. In the States of Karnataka and Rajasthan,
the trends of MRP revisions of OP-1, OP-3 and OP-4 of strong Beer 650ml SKUs also
show price parallelism.
(ii) Free/Open Markets - In the States and UTs that follow the Open/Free Market Model
of distribution of liquor, even though Beer manufacturers have a lot of freedom in the
fixation of prices of Beer, OP-1, OP-3 and OP-4 co-ordinated amongst themselves to
fix the prices of the Beer they sold (in Maharashtra, West Bengal and the UTs of
Puducherry and Daman) to maintain their market share and also have identical MRPs
approved by the State Government. In the State of Maharashtra, the trend of MRP
revisions of strong Beer 650ml SKUs of OP-1, OP-3 and OP-4 also shows price
parallelism.
(iii) Hybrid Market - In the Hybrid Market of Delhi, in order to get favourable price
revisions from the State Government, OP-1, OP-3 and OP-4 joined hands to discuss
their pricing strategies and exchanged cost cards to co-ordinate their prices.
(iv) Auction Market - With respect to States following the Auction Model, no comments
are being made with regard to the indulgence of the OPs, if any, in any anti-
competitive activity.
From the above, the DG concluded that OP-1, OP-3 and OP-4 indulged in the
exchange of vital information amongst themselves about pricing and other
confidential and business-sensitive information. They also mutually agreed on price
revisions (both MRP as well as EBP) to be sought from the respective State
Governments. There were a number of e-mail communications/WhatsApp
messages/SMSs and even conference calls exchanged between the top managerial
personnel of these three companies to decide upon the price revisions to be sought in
their individual price revision requests, follow-up with State Government Authorities
Suo Motu Case No. 06 of 2017 7
and even co-ordinating a common response to the Show-Cause Notices issued by
certain State Excise Commissioners. These companies approached the State
Governments collectively through the common platform of OP-5 to get price
revisions to agreed levels so as to avoid price wars among themselves. As such, OP-1,
OP-3, OP-4 and OP-5 have contravened the provisions of Section 3(3)(a) read with
Section 3(1) of the Act.
(v) Sharing Sales and Stock Data - OP-1, OP-3 and OP-4 have also been sharing their
periodical sales and sales data with each other as a monitoring mechanism to check
that each has adhered to the 'understanding/agreement' reached among them, besides
monitoring their inter se market share in different States, as well as nationally.
(vi) Agreement to Limit/Restrict Supply - In addition, OP-1, OP-3 and OP-4 also
collectively decided upon the strategy to oppose Government policies (including
fixation of prices). In a few cases, for instance in Odisha, Maharashtra and West
Bengal, whenever State Governments hiked the Excise duty or reduced EBP/MRP of
Beer, these three OPs collectively decided to stop production and supplies in the State
in contravention of the provisions of Section 3(3)(b) read with Section 3(1) of the Act.
(vii) Sale to Premium Institutions in Bengaluru - Since premium institutions (bulk buyers)
are a significant platform for Beer manufacturers to promote their products, Beer
companies offer marketing support to premium institutions in the form of financial
incentives for special offers/events around their brands. OP-1 and OP-3 'agreed' to
co-ordinate with respect to premium institutions/bulk buyers in Bengaluru and shared
the costs and benefits while keeping competition out.
(viii) Purchase of Second-Hand Bottles - OP-1 and OP-3 had an 'understanding' to share
their off-take of old bottles from the market for reuse in their breweries. Further, they
also agreed upon the rate at which they would procure such bottles from bottle
collectors. They also closely monitored each other's purchase of old bottles. They had
colluded amongst themselves regarding the number of truckloads of second-hand
bottles each would buy for reuse in its bottling plants. They had also decided upon the
rate at which they would buy such bottles from the market. All Beer companies are
hugely dependent on second-hand used bottles in their production cycle since bottles
Suo Motu Case No. 06 of 2017 8
constitute the largest cost component for Beer manufacturers. As such, limiting the
volume of the bottles each could procure from bottle collectors has the direct effect of
limiting the production of Beer by the companies.
(ix) Role of OP-5 - OP-1, OP-3 and OP-4 used to hold discussions among themselves
about their prospective quotes and the way forward with State Excise departments,
and the representatives of these member companies used to meet Excise Authorities
under the umbrella of OP-5 so that there would collectively be better chances of
getting price increases. On its part, OP-5 also proposed the rates/quantum of price
revisions to be applied for before the State Government. Besides, to facilitate one-to-
one discussions among its member companies on various issues, including pricing,
OP-5 also arranged conference calls among the top managerial personnel of the
companies. As such, OP-5, through its practices, decisions and conduct of its office-
bearers, facilitated the anti-competitive agreement/understanding and concerted action
between OP-1, OP-3 and OP-4.
(x) Awareness of Competition Issues - There are multiple e-mails which evidence that
OP-5 as well as OP-1, OP-3 and OP-4 were aware that their joint representations on
pricing to Government Authorities and discussions with competitors on restraint of
trade, pricing etc., violate the provisions of competition law. The top managerial
personnel of the OPs had warned/advised each other from holding such discussions on
OP-5's platform. However, the parties continued to participate in such discussions
with each other and also involved OP-5, while making joint representations to State
Government Authorities on pricing issues.
(xi) Period of Cartel - Price co-ordination and information exchange amongst OP-1, OP-3
and OP-4 began prior to 20.05.2009 (since 2007), when the provisions of Section 3 of
the Act came into force, and continued at least upto 10.10.2018, the date on which the
search and seizure operations were commenced by the DG. OP-5's platform had been
used since 2013 onwards.
(2) In case the answer to Issue No. 1 is affirmative, who were the persons of the OPs liable
for their company's/association's conduct in terms of Section 48 of the Act at the time
of the said contravention and what were their roles?
Suo Motu Case No. 06 of 2017 9
(i) The DG identified the following two persons from OP-1, three persons from OP-3 and
three persons from OP-4 to be liable in terms of the provisions of Section 48(1) of the
Act:
Company Name Designation
Kalyan Ganguly Former Managing Director from 2009 till July 2015
Managing Director since 01.08.2015, Former Joint
OP-1 Shekhar President from September 2012 till July 2015 and
Ramamurthy Former Deputy President from October 2007 till
August 2012
Paolo Alberto Former Managing Director from June 2009 till
Francesco Lanzarotti 2012
Grant Murray Former Managing Director from August 2013 till
Liversage December 2014
Former Managing Director from January 2015 till
OP-3
31.10.2016, Former Sales Director from April 2012
till 2014 and Former Director Supply Chain from
Shalabh Seth
2009 till March 2012
(Is presently working as Chief Supply Chain
Officer of OP-1)
Former Managing Director from 2010-11 till
Soren Lauridsen
March 2014
Former Managing Director from April 2014 till
OP-4 Michael Norgaard
April 2017 and Former Deputy Managing Director
Jensen
from June 2013 till March 2014
Nilesh Patel Managing Director since May 2017
(ii) Further, the DG identified the following three persons from OP-1, three persons from
OP-3 and four persons from OP-4 to be liable in terms of the provisions of Section
48(2) of the Act:
Company Name Designation
Former Executive Director and Chief Financial Officer
Steven Bosch
till 01.01.2019
Chief Sales Officer since 28.08.2017, Former Executive
OP-1
Vice President Sales from July 2014 till June 2017 and
Kiran Kumar
Former Senior Vice President Sales from July 2009 till
June 2014
Suo Motu Case No. 06 of 2017 10
Company Name Designation
Perry Goes Head of Strategic Planning & Analytics till 28.08.2017
Former Sales Director from January 2015 till 15.11.2016
Nilojit Guha and Former Vice President Sales Control from May 2011
till December 2014
Former Vice President Sales till 15.11.2016, Former Vice
Suryanarayana President Sales South from May 2011 till 2016 and
Diwakaran Former General Manager Sales South from 2009 till
April 2011
OP-3
Former Director Solutions Business Unit India from June
2017 till 15.10.2018, Former Vice President Financial
Control from October 2014 till May 2017, Former
Anil Arya General Manager Operations Finance from August 2012
till September 2014, Former General Manager Decision
Support Sales from May 2011 till July 2012 and Former
Head Decision Support Sales from 2009 till April 2011
Former Deputy Managing Director from September 2014
Pawan Jagetia
till March 2018
Dhiraj Kapur Vice President Corporate Affairs
Vice President Mont and Premium Business since 2018
OP-4
Anil Bahl and Former Sales Director/Sales Head/Vice President
Sales from 2009-10 till 2017-18
Mahesh Former Vice President Marketing (Head Marketing) from
Kanchan 2014-15 till 2018-19
(iii) Furthermore, with respect to OP-5, the DG identified Mr. Sovan Roy (alias Mr.
Shobhan Roy), the Director General of OP-5 since 07.01.2013, to be liable in terms of
Section 48 of the Act.
Proceedings before the Commission:
12. Upon consideration of the investigation report submitted by the DG, the Commission,
vide orders dated 26.11.2019 and 12.03.2020, forwarded an electronic copy of the NCV
Suo Motu Case No. 06 of 2017 11
qua OPs' investigation report to the OPs and their 19 respective individuals identified by
the DG to be liable in terms of the provisions of Section 48 of the Act (collectively
known as the 'parties').
13. The parties were given an opportunity to file their suggestions/objections, if any, to the
investigation report of the DG, along with a brief synopsis thereof. Further, the OPs were
directed to file their duly audited financial statements, including Balance Sheets and
Profit and Loss Accounts for the Financial Years ('FYs') 2009-10 till 2018-19 along
with their revenue and profit details arising from the sale of Beer in India for the above-
stated FYs, duly certified by a chartered accountant, and their 16 individuals were
directed to file their income details, including Income Tax Returns ('ITRs') for the FYs
2016-17 till 2018-19.
14. Between July and December 2020, the parties filed their suggestions/objections to the
investigation report of the DG and relevant financial details. Thereafter, on 11.02.2021
and 02.03.2021, the Commission heard the oral submissions made on behalf of the
parties on the DG report and on the respective applications for lesser penalty filed under
Section 46 of the Act. The Commission decided to pass an appropriate order in the
matter in due course. Thereafter, the parties submitted their respective written arguments.
Submissions of the parties:
15. In their suggestions/objections to the DG report, during the oral hearings and in their
convenience compilations and written arguments, the parties made the following
submissions:
15.1 United Breweries Limited (OP-1)
15.1.1 Highly regulated industry - The Beer market in India is highly regulated. Every
aspect of Beer value chain, from production and dispatch, pricing, labelling and
packaging, exports, to purchase and sale, issuance of licences, and imposition of
special duties/taxes is controlled by State Authorities. In view of such regulations
and control, the role of Beer manufacturers in the market is very limited. Beer
manufacturers have negligible control over critical variables that influence demand
and competition and ensure healthy profitability and growth in the market, and this
Suo Motu Case No. 06 of 2017 12
imbalance significantly distorts the Beer market, often putting viability of the
business and survival of Beer manufacturers in the market at risk. The extremely
imperfect market conditions make the market for manufacture and sale of Beer a
peculiar market, unlike other sectors of the Indian economy. As such, applying the
same standards that the Commission applies to enterprises that manufacture and
retail their products in conditions that do not present such unique challenges to
enterprises involved in the Beer industry in India, would lead to an outcome that
would be contrary to the spirit of the law as set out in the Act.
15.1.2 No hardcore cartel - The present matter bears no similarity to a typical case of
cartelisation, as (i) given the complex and peculiar nature of the Beer industry, the
information (cost cards, draft price increase letters and company sales information)
shared cannot be considered commercially sensitive as the same did not have the
ability to enable the parties to use it and determine or influence prices or any other
aspects of Beer industry trade; (ii) information exchanges were infrequent and
lacked any specific trend or predictability in terms of timing or objective; and (iii)
OP-1 or any other OP neither had the scope nor the intention to control or
determine market dynamics, including prices.
An information exchange that practically has no likelihood and has in fact
not caused any appreciable adverse effect on competition ('AAEC') and was rather
forced upon by market conditions should be distinguished from an anti-competitive
cartel under Section 2(c) of the Act. The draconian laws and practices adopted by
the States make it impossible for Beer companies to compete in the ordinary course
of business.
The DG has found contravention of the provisions of Section 3(3)(a) of the
Act, i.e., "directly or indirectly determining purchase or sale prices". As
determination of prices of Beer is solely in the hands of the State and the Beer
manufacturers are only price takers, the very question of the OPs making an
attempt to determine the prices does not arise. Increase in consumer prices of Beer
in the States was, in most instances, on account of State Government's actions and
not on account of communications or actions on part of OP-1 and other OPs.
Suo Motu Case No. 06 of 2017 13
Also, with regard to contravention of the provisions of Section 3(3)(b) of
the Act, the DG has recorded only four instances of co-ordination amongst the OPs
in disrupting the supply of Beer in the states, i.e., in Odisha (for less than two
months during 2015), in Maharashtra (for about two months during 2017), in West
Bengal (about two months during 2018) and in Rajasthan (for about one week
during 2018) which too were necessitated due to arbitrary actions of the State
Governments.
A mere occurrence of a meeting/exchange of information does not signal or
establish the possibility of an 'agreement'. Further, in most cases, exchange of
information among OP-1 and other OPs was not even implemented/realised.
Hence, all evidence, their credibility and facts surrounding the circumstances have
to be weighed in, and the DG cannot conduct a complete and effective
investigation without first understanding the market realities and industry
dynamics.
15.1.3 Exchange of information to exert countervailing power - OP-1 and other OPs
indulged in information exchange either at the insistence of Government officials
or, in most cases, to counter the arbitrary actions of the State Government or State
Corporations for legitimate interests. By communicating with each other, the OPs
were only trying to exert countervailing power in response to the market power of
the monopsonist State Authorities. Every e-mail exchanged by OP-1 in regard to
all nine States/UTs in respect of which the DG has found contravention of the
provisions of the Act by OP-1 can be explained in this context.
15.1.4 Exchange of information at instance of State Authorities - Several instances of
objectionable information exchange as identified by the DG, were on account of
directions from certain State Corporations itself. In such cases, the OPs, including
OP-1, were forced to discuss and collaborate even on commercially sensitive
issues, such as price increase proposals, sales data, sales targets, etc. Even in cases
where OP-1 and other OPs did not discuss or collaborate on prospective price
increases, the State Corporations shared details from the cost cards submitted by
other OPs to drive a bargain with OP-1 and vice-versa or to stall legitimate
Suo Motu Case No. 06 of 2017 14
attempts for seeking a price increase by OP-1. In such cases, OP-1 or any other
Beer company would not have any option but to comply with the directions of
State officials. Transparency in prices of competitors existed largely due to the
practices adopted by State Governments or State Corporations. To that extent,
competition on pricing amongst Beer manufacturing companies was diminished
not due to the conduct of OP-1 or other OPs but owing to the arbitrary interference
by the State Governments and State Corporations. This problem became multi-fold
due to the onerous and complex pricing policies of the State Governments and
State Corporations, leaving almost no scope for Beer manufacturing companies to
compete freely and fairly on merits.
15.1.5 State Authorities not approached by the DG - The DG has not reached out to any
State Corporation to: (i) corroborate the evidence already collected; (ii) seek
additional evidence; or (iii) seek their views on the functioning of the Beer industry
in India.
15.1.6 Mere exchange of information/communications is insufficient to prove existence of
a cartel - Merely exchanging information with competitors is insufficient to
establish that the Parties were acting in a co-ordinated manner contrary to the
provisions of the Act. Evidence of information exchange has to be considered in
conjunction with evidence establishing that: (i) the agreed co-ordinated behaviour
was implemented/realised in the market; and (ii) such behaviour resulted into
AAEC and/or consumer harm. The information exchange/discussions between OP-
1 and other OPs on prices (i.e., EBP quoted) did not actually translate into EBP
approved by the State Corporations.
15.1.7 Collective representation by Industry Participants - The DG has mischaracterised
the legitimate discussions and sharing of information amongst the OPs for making
collective representations on behalf of the industry to the State Governments and
State Corporations as communications for cartelisation. While, as a practice, OP-1
does not engage with OP-5 for any sales or pricing-related issues, it is only at the
insistence of State Corporations (like Rajasthan and West Bengal) directing that
any representation to them be routed through OP-5 that OP-1 was forced to engage
Suo Motu Case No. 06 of 2017 15
with OP-5 and seek their intervention. OP-5 was at best the mouthpiece of the Beer
industry for engaging with State Corporations for complex regulatory
impediments. OP-1's interactions with OP-5 was limited to being a member of the
industry body and being a significant player in the market, to provide support and
insight over policy-related matters which had an impact on the industry as a whole.
Representations were made by the OPs through OP-5 only to raise legitimate issues
faced by the Beer industry as a whole and not for the benefit of only the OPs or
certain specific Beer manufacturing companies. The results, if any, of joint
representations/actions were equally relevant for and applicable to the industry and
did not specifically benefit only the OPs.
15.1.8 Disruptions in Supply due to abrupt and arbitrary changes in State Policies -
Restriction on supplies by various OPs at different times in the States of Odisha,
Maharashtra and West Bengal was necessitated due to significant and arbitrary
increase in duty by respective State Authorities, which made it commercially
unviable for OP-1 to undertake any supplies until the State Government, based on
common representation, agreed to a duty reduction. The act of supply disruptions
was not intended to form any quantity-restricting cartel for earning supra-normal
anti-competitive profits. Further, such disruptions were only for very short
durations of time and though the broad range of the OPs stopping such supplies
may have been the same, stoppage duration for each OP was dependent on the
exhaustion of its stock and resumption of production based on availability of raw
materials etc. In any event, restrictions on supplies affected the business interests
of the OPs only, and it was not in their favour to take such action which would be
detrimental to their own interests. If that were the case, then the instances of such
purported co-ordination would not be limited to the few that have been found by
the DG. This evidences that such co-ordination was only a last resort to survive in
the market.
15.1.9 Purchase of Second-hand Bottles - Bottles constitute the largest proportion of cost
for Beer manufacturers (over 30%). Prior to 2010, all Beer manufacturers used the
same bottles in terms of design for packaging their Beer, i.e., Industry Bottles. The
Beer manufacturers would collect these bottles back from bottle collectors and
Suo Motu Case No. 06 of 2017 16
reuse them. This was because the price of old bottles was almost two-to-three times
less than the price of new bottles. However, due to practices in the industry
regarding buying back of old bottles, which included old bottle collectors hoarding
the bottles and regional players not injecting new bottles into the market but buying
back stock of old bottles (initially injected by the larger manufacturers), the price
of old bottles increased over time. This drove OP-1 to launch its own patent bottles
in 2010. Due to this, various other Beer manufacturers also launched their own
patent bottles. Hence, the OPs discussed amongst themselves the prices at which
they would buy back the old Industry Bottles from collectors to safeguard
themselves from increasing costs of old bottles. OP-1 and OP-3 discussed and
agreed on the basic price for procuring both old standardised Industry Bottles as
well as patent bottles to ensure optimal cost management and improve efficiency in
procurement of old bottles, as well as, to prevent hoarding of old bottles by
suppliers. Any price rise in the cost of procuring bottles would have to be passed
on to the end consumers leading to further increase in the Beer retail prices which
were already quite high owing to excessive State Government levies and taxes.
However, the prices that the OPs had agreed to for buying back their own patent
bottles also could not be met.
Further, there was no attempt to limit the volume of procurement of bottles,
as that would be detrimental to OP-1's supply of Beer. From the various e-mail
correspondences, it is evident that the OPs had exchanged information and
discussed bringing an organised structure to an extremely unregulated market of
procuring Industry Bottles that were commonly used by all the OPs until patent
bottles were introduced. At the time of this transition, Industry Bottle collectors
and suppliers took advantage of the low elasticity of demand and created an
artificial scarcity, thereby turning each OP against the other and creating a mirage
of collusion. The end result was that OP-1 ended up buying its own bottles at
higher prices, and any sort of discussion between the OPs to forestall the Industry
Bottle suppliers from taking advantage of the situation never fructified.
Suo Motu Case No. 06 of 2017 17
15.1.10 No AAEC in India - There has been no AAEC in India, as understood under
Section 3(3) read with Section 3(1) of the Act, because of the conduct of OP-1. The
consumers were not being impacted due to the price increases of EBPs sought by
the OPs. The unreasonable increase in price for consumers was a result of the
frequent and significant increase in taxes, levies and Excise duties imposed by the
State Governments while the OPs continued to function for long periods at the
same EBPs.
Further, OP-1 was forced to engage in communications with its competitors
only as a means to counter the monopsony powers exercised by the State
Governments. Its discussions were not to "control or attempt to control the
production, distribution, sale or price of, or trade in goods" aimed at illegitimate
gains, as would have been the case if the discussions were pursuant to a cartel;
rather, at times, exchange of information or interactions were caused at the
insistence of officials of the Governments or the State Corporations.
The conduct of OP-1 does not meet the factors inscribed in Section 19(3) of
the Act. The conduct was not intended to nor did it: (i) create entry barriers for new
entrants in the market; (ii) drive existing competitors out of the market; or (iii) in
any way, foreclose competition.
Notwithstanding instances of certain exchange of information for price
increases submitted to states such as Rajasthan and Andhra Pradesh, there was no
impact at all on the relevant State Excise Corporations' decisions to not allow price
increases for many years. This itself shows the futility of the purported anti-
competitive conduct by OP-1 and other OPs.
If anything, the intermittent instances of either information exchange or
discussions by OP-1, and few instances of purported co-ordination with its
competitors, was intended, in most instances, to safeguard consumers from absurd,
arbitrary and unreasonable price increases and, in other instances, in an attempt to
counter the single-minded, unreasonable, arbitrary acts, omissions and monopsonic
conduct of the relevant State Corporations and State Governments. State
Governments have significant control over the price of Beer - they limit the ability
Suo Motu Case No. 06 of 2017 18
of the Beer manufacturers to increase the prices; however, continue to raise taxes
and hence, consumer price.
OP-1 had engaged Nathan Economic Consulting India Private Limited
('Economic Consultant') to undertake an independent economic assessment to
determine: (i) if the co-ordinated decisions of OP-1 and its competitors were
actually implemented/realised in the market; and (ii) if the information
communication among OP-1 and its competitors had any AAEC and consumer
welfare in the market. The findings of the Economic Consultant were filed with the
DG and the Commission in the form of an Economist Report. The Economist
Report establishes that the information exchange, discussions and few instances of
purported co-ordination between OP-1 and its competitors have not caused AAEC
in the Beer market in India for the following reasons:
(i) Declining profits/losses of OP-1 in most states where cartelisation has been
found by the DG are evidence that the information exchange was not driven by
the goal of earning supra-normal profits.
(ii) Growth in consumer prices exceeds growth in EBP.
(iii) Information exchange and discussions amongst OPs did not have any effect on
approved EBPs and thus, on the market. In fact, approved EBPs for the OPs
were also not uniform in several instances.
There was also no AAEC on account of parallel pricing, since the OPs did
not have a motive to gain extraordinary prices but to counteract the practices of the
State Governments.
Discussions regarding second-hand bottles also did not lead to AAEC as
they were undertaken to: (i) avoid significant increase in retail prices for
consumers; (ii) implement optimal cost management in procurement of old bottles;
and (iii) improve efficiency in such procurement. Anyhow, such discussions
between OP-1 and OP-3 were not implemented. Commercial rationale behind
taking off their bottes from market by OP-1 was that State Governments did not
allow the OPs to pass on their costs to the consumers and hence, the OPs were
Suo Motu Case No. 06 of 2017 19
forced to control the prices of their bottles in the market because bottles constitute
over 30% cost for a Beer manufacturer. Hoarding of old bottles by bottle collectors
and no injection of new bottles by smaller Beer manufacturers in the industry
resulted in significant increase in buy-back price of old bottles for OP-1 and its
competitors, and thus, drove OP-1 to launch its own patent bottles in 2010.
The one-off incident of discussion related to premium institutions never
resulted into an agreement or was implemented, and there was no AAEC.
15.1.11 Market conditions post 10.10.2018 remain exactly the same as those existing prior
to cessation of the purported co-ordination amongst the OPs.
15.1.12 OP-1's market shares (based on sales volume for Kingfisher Strong ('KFS')
650ml) fluctuated significantly from 2008-09 to 2019-20 (until September 2019),
across most states. At all India level, across all Beer brands, market share of OP-1
remained similar, however, market share of OP-4 increased from 3% in 2009-10 to
16% in 2018-19 and that of OP-3 decreased from 23% to 12% during this period.
This is contrary to an outcome achieved through collusive means. Changes in
market shares of OP-1 and its competitors are indicative of volume-based
competition in the Beer market.
15.1.13 Value addition and lesser penalty - OP-1 in its lesser penalty application and
submissions made thereafter explained the modus operandi and chronology of
related events to each communication/interaction amongst the OPs. Further, OP-1
provided context to the information exchange amongst the OPs, including
information exchanged due to suggestion/requirement of the State Corporation.
OP-1 also submitted to the DG, instances of sharing of information with regard to
their revenue, stock movement, sales and stock held with the distribution channel,
which information was not in possession of the DG beforehand. OP-1 further made
significant value addition to the investigation by submitting instances of exchange
of pricing information amongst the competitors in additional states of Karnataka
and West Bengal, and UTs of Puducherry and Daman and Diu. The DG has also
relied upon price increase information submitted by OP-1. OP-1 also submitted
information, evidence and instances of limiting/restricting supply of Beer by the
Suo Motu Case No. 06 of 2017 20
OPs in an attempt to protest against the increase in prices or duties on Beer
production or sale in certain states like Maharashtra. The order dated 31.10.2017
passed by the Commission forming prima facie opinion does not talk about
interactions amongst the OPs for the purchase of second-hand bottles. Information
pertaining to interactions/communications regarding purchase of second-hand
bottles was given by OP-1. Similarly, information regarding the exchange of
communications relating to premium institutions and using the platform of OP-5
was also given by OP-1 only. Though some of the evidences furnished by OP-1
have not been considered by the DG in arriving at its conclusions, the same led to
significant value addition to the investigation.
During the course of the investigation, OP-1 had provided: (i) copies of
communications between OP-1 and other OPs; (ii) cogent data to provide a context
to such communications; and (iii) facts demonstrating that there was no AAEC
because of such communications. However, the DG has not considered all the
information provided by OP-1 in an effective manner.
15.1.14 Penalty and Mitigating Factors - No penalty ought to be imposed as the present is
not a typical case of cartelisation. Imposition of penalty on the OPs will have far
reaching consequences on highly constrained Beer industry. The Commission
ought to consider (i) hardships faced by Beer manufacturers; (ii) the fact that
discussions amongst the OPs were a natural reaction to counter the monopsonist
State departments' exploitative practices; and (iii) the fact that there has been no
AAEC, while deciding if penalty ought to be imposed.
Further, the following mitigating factors ought to be considered:
i. Instances of interaction amongst the OPs were sporadic and limited only to
certain states;
ii. No harm to consumers caused;
iii. Information exchange did not have any effect on the approved EBPs since the
relevant State Governments decided not to allow the increase, in some
Suo Motu Case No. 06 of 2017 21
instances, year after year, nor did the State Governments allow reductions in
EBP;
iv. Co-ordination in supply disruptions was to convince the State Departments to
not increase Excise duties unreasonably;
v. Information exchange and communication regarding premium institutions and
buy back prices of old bottles were never implemented;
vi. Beer market was characterised by intense volume-based competition amongst
the OPs as evidenced by Economic Consultant's report;
vii. OP-1 had initiated a detailed internal investigation in June 2018 prior to
Search and Seizure operations of the DG;
viii. OP-1 has also drafted and implemented a comprehensive and robust
competition compliance manual which provides guidance to the company and
its employees on compliance with the relevant laws and regulations (including
competition law) which is updated from time to time; and
ix. OP-1 has extended full co-operation and provided value additions to the DG's
investigation.
Also, if penalty is imposed, the same should be on the basis of principle of
proportionality and relevancy of infringement to the turnover from the cartel
participant as envisaged by the Hon'ble Supreme Court in Excel Crop Care
Limited v. Competition Commission of India and Another (2017) 8 SCC 47. The
Commission should consider turnover or profits (as applicable) of OP-1 from the
sale of Beer only in states affected by OP-1's conduct. Further, the Commission
should not consider entire time period of investigation (i.e., FY 2009-2010 to FY
2018-2019) and should only consider actual duration of discussions in such states
as the evidence on record clearly establishes that the discussions were not
continuous in nature.
15.2 Mr. Kalyan Ganguly, former Managing Director of United Breweries Limited
15.2.1 The DG Report is in violation of the principles of natural justice in relation to the
findings against Mr. Ganguly under Section 48(1) of the Act. The DG did not grant
Mr. Ganguly an opportunity to present his defense during investigation.
Suo Motu Case No. 06 of 2017 22
15.2.2 During his tenure as the Managing Director of OP-1, Mr. Ganguly was involved in
decision making based on inputs from established senior management teams
comprising of senior most executives of the various business verticals like sales,
analytics, marketing, supply chain and finance. As the Managing Director, Mr.
Ganguly was not involved in day-to-day operations of OP-1. In his role as
Managing Director, Mr. Ganguly involved himself only in relation to key and
strategic discussions and decisions in relation to operations and management of
OP-1. As such, since Mr. Ganguly was not involved in day-to-day affairs of OP-1,
there was no reason for him to be aware of the alleged conduct.
15.2.3 In the entire DG Report, the DG has relied on two e-mail communications dated
01-02.06.2010 and 18.05.2011 to affix liability under Section 48(1) of the Act on
Mr. Ganguly. The DG has taken no effort whatsoever to independently corroborate
the fact that Mr. Ganguly had knowledge of the alleged anti-competitive conduct of
OP-1. Mr. Ganguly was the Managing Director of OP-1 at the time and was as
such, marked on several e-mails, not necessarily aimed at bringing these issues to
his attention or seek his inputs. As Managing Director, Mr. Ganguly was not
involved in day-to-day activities of OP-1.
15.3 Mr. Shekhar Ramamurthy, Managing Director of United Breweries Limited and
former Chairman of All India Brewers' Association
15.3.1 During his tenure as the Managing Director of OP-1, Mr. Ramamurthy was
involved in decision making based on inputs from established senior management
teams comprising senior most executives of various business verticals like sales,
analytics, marketing, supply chain and finance. As the Managing Director, Mr.
Ramamurthy was not involved in day-to-day operations of OP-1. In his role as
Managing Director, Mr. Ramamurthy involved himself only in relation to key and
strategic discussions and decisions in relation to operations and management of
OP-1. As such, since Mr. Ramamurthy was not involved in day-to-day affairs of
OP-1, there was no reason for him to be aware of the alleged conduct.
Suo Motu Case No. 06 of 2017 23
15.3.2 Mr. Ramamurthy, as Managing Director of OP-1 at the time, was marked on
several e-mails, not necessarily aimed at bringing these issues to his attention or
seek his inputs. As Managing Director, Mr. Ramamurthy was not involved in day-
to-day activities of OP-1. He was rather entrusted with management of the business
which inter alia included appointing distributors, dealers, marketing and
sponsorship agencies, register and develop intellectual property rights, procure
registrations, execute share/debenture certificates etc. He was also required to
undertake initiatives for corporate social responsibility, apply for licenses and
permits etc. in the ordinary course of business and perform all other functions as
Managing Director.
15.3.3 Relying on submissions made on behalf of OP-1, it was submitted that the DG has
proposed liability on Mr. Ramamurthy based on certain e-mail communications,
disregarding the factual scenario presented and explained in detail by Mr.
Ramamurthy and by OP-1 and its other employees.
15.3.4 The DG has relied upon a solitary document pertaining to price proposals and
brands introduction by OP-1 and its competitors in the State of Andhra Pradesh in
2018-19, to conclude that Mr. Ramamurthy had complete details of the pricing
proposals of OP-1's competitors. To the best of Mr. Ramamurthy's recollection
and knowledge, the said document related to a pricing proposal which was shared
with OP-1 by its exclusive distribution partner in the State of Andhra Pradesh. The
relevant document was not a pricing proposal exchanged between OP-1 and other
competitors of OP-1. The relevant document was drawn up by OP-1's distribution
partner and illustrates the prospective prices in the State of Andhra Pradesh if the
Excise department allowed a price increase. The DG inexplicably did not even
confront Mr. Ramamurthy with this document while his statement was recorded on
oath. Anyhow, such pricing proposals were not implemented. Therefore, there was
no AAEC. Mere information of basic prices of the brands of competitors in a State
would not constitute contravention of the Act.
Suo Motu Case No. 06 of 2017 24
15.3.5 The DG has also relied upon the Affidavit of Mr. Steven Bosch wherein Mr. Bosch
stated that Mr. Ramamurthy was initially reluctant and resisted in bringing up the
issues of anti-competitive conduct before the Board of OP-1. However, the fact is
that it was Mr. Ramamurthy who initiated an internal investigation by engaging
external law firms and forensic experts to review and analyse certain
communications between officers/employees of OP-1 with third parties (which
could have included competitors of OP-1).
15.3.6 The DG has also relied on the statement of Mr. Ramamurthy given under oath to
conclude that Mr. Ramamurthy co-ordinated with the competitors. Unfortunately,
the DG has completely misconstrued the statement given by Mr. Ramamurthy and
has cherry picked parts of the statement/evidence to suit its pre-determined and
incomplete conclusions. Mr. Ramamurthy in his statement agreed to the
discussions amongst the OPs. However, he also explained in detail that such
discussion was, inter alia, driven by the need to survive and safeguard OP-1
against colossal losses witnessed by the Beer industry due to the nature of the
market. Mr. Ramamurthy also explained that the instance of sporadic
interactions/discussions did not lead to any AAEC. On the contrary, actions of OP-
1 resulted in safeguarding consumer benefits. Mr. Ramamurthy's explanation
regarding the existence of active and vigorous competition through the mechanism
of trade discounts, incentives and consumer promotions have been completely
ignored by the DG.
15.3.7 The mischaracterisation of Mr. Ramamurthy as being the 'kingpin' of the cartel on
the basis of him being the Managing Director of OP-1, i.e., the market leader in the
industry, clearly depicts non-application of mind by the DG. The DG has not
presented any evidence to support an allegation of this magnitude. There is no
evidence on record to substantiate the finding that Mr. Ramamurthy was a cartel
kingpin. Additionally, none of the competitors of OP-1 have expressed anything
that would make the DG reach such a conclusion. Further, discussions amongst
industry members were on-going even before Mr. Ramamurthy was appointed as
the Managing Director of OP-1, making it baseless to term him as the kingpin.
Suo Motu Case No. 06 of 2017 25
15.3.8 Mr. Ramamurthy's position of being OP-5's President does not lead to a
conclusive finding that OP-5 was used as a hub for the alleged conspiracy or that
he was driving any cartel like behaviour using OP-5. In any event, the DG's
conclusion is not supported by any evidence. Prior to Mr. Ramamurthy, Mr.
Shalabh Seth (of OP-3) had been President of OP-5, and so has Mr. Chris White
(of OP-3); however, no such findings and observations have been made against
them by the DG.
15.4 Mr. Steven Bosch, Chief Financial Officer and Executive Director of United
Breweries Limited
15.4.1 It is an admitted position that there is no evidence of any e-mail correspondence
which was either sent by Mr. Steven Bosch to another competitor or sent by
another competitor to Mr. Steven Bosch. Further, there is also no evidence in the
DG report of Mr. Steven Bosch having met with an official working with a
competitor Beer manufacturer. There is also no evidence in the DG report that Mr.
Steven Bosch attended an industry association meeting organised by OP-5. There
is no evidence in the DG report that Mr. Steven Bosch's mobile device (which was
imaged by the DG during the Dawn Raid) had a record of contact with a
competitor(s), except for one WhatsApp exchange on 9 November 2017. There is
also no evidence in the DG report that the 11 notebooks of Mr. Steven Bosch
which were seized by the DG during the Dawn Raid had any incriminating
evidence of contact with a competitor. OP-1 has not named Mr. Steven Bosch as
one of OP-1's officials who had communication with a competitor Beer
manufacturer(s). OP-1 has also not named Mr. Steven Bosch as one of OP-1's
officials who were involved in taking decisions for making requests to State
Governments for increasing the EBP and MRP of Beer sold by OP-1 from
01.04.2009 till date. Despite these admitted positions, the DG has recommended
individual liability against Mr. Steven Bosch.
15.4.2 The DG has erroneously relied on the factors relevant under Section 48(1) of the
Act to recommend individual liability under Section 48(2) of the Act, even though
the threshold for imposition of individual liability is materially different from
Suo Motu Case No. 06 of 2017 26
Section 48(1) of the Act. Under Section 48(2), the burden was on the DG to
demonstrate the de-facto or active involvement of Mr. Steven Bosch in the alleged
anti-competitive conduct. However, given the aforesaid admitted positions, there is
no evidence on record which even faintly establishes the de-facto or active
involvement of Mr. Steven Bosch in the alleged anti-competitive activities of OP-
1. The DG has not been able to prove any consent, or connivance, or neglect on
part of Mr. Steven Bosch to recommend individual liability against him under
Section 48(2) of the Act. Rather, instead of proving consent, or connivance, or
neglect on part of Mr. Steven Bosch, the DG has wrongly relied on the "in-charge
of and responsible to" test under Section 48(1) of the Act to hold Mr. Bosch liable.
15.4.3 There is also no evidence on record to even justify recommendation of individual
liability against Mr. Steven Bosch under Section 48(1) of the Act. Mr. Steven
Bosch was the Chief Financial Officer ('CFO') and Executive Director ('ED') of
OP-1 from 01.09.2016 to 31.12.2018. In his capacity as the CFO and ED, Mr.
Steven Bosch had the responsibility of financial performance of OP-1; his primary
responsibility being to manage the profit and loss account and monitor the
performance of OP-1 against the agreed budget. As such, Mr. Steven Bosch only
had broad and high-level knowledge of pricing, pricing strategy, sales data and
targets, as well as volume data of OP-1. The role and profile of Mr. Steven Bosch
did not entail any contact with OP-1's competitors or decision making in relation to
OP-1's sales or prices.
15.4.4 It was only in June 2018 that Mr. Steven Bosch for the first time was made aware
that there might be certain competitor contacts between certain employees of OP-1
with third parties (which could have included OP-1's competitors), and which
could potentially be considered as anti-competitive under the Act. From June 2018
until the Dawn Raid, Mr. Steven Bosch exercised all due diligence and took all
possible steps to: (a) include competition law policies and trainings at OP-1; (b)
carry out an internal competition audit of OP-1's internal servers bearing e-mail
correspondence and update Heineken about it; (c) persist and escalate with the
internal competition audit; (d) push for conclusion of the internal competition audit
so that possible next steps, including approaching the Commission, could be
Suo Motu Case No. 06 of 2017 27
planned and implemented; (e) create awareness of the situation amongst other
Board members and sought guidance from the legal team; and (f) consider
independent legal advice in the face of internal resistance. All the above steps were
taken between June 2018 and October 2018, i.e., immediately after Mr. Steven
Bosch for the first time got to know about the possibility of an anti-trust violation
by OP-1 until the Dawn Raid on 10.10.2018.
15.4.5 Further, it was due to the reason of internal audit that was going on that a "few e-
mails" were seized by the DG during the Dawn Raid from Mr. Bosch's cabin.
These e-mails relate to other persons and were dated before Mr. Steven Bosch
joined in at OP-1. This was explained by Mr. Bosch during recording of his
deposition before the DG at the time of search and seizure operation. However,
despite the above context been provided by Mr. Bosch, the DG completely
disregarded these submissions and simply assumed that the knowledge of these e-
mails by Mr. Bosch (from an inconclusive, ongoing internal competition audit,
about a possible violation of the Act, subject to further evaluation) amounts to
consent or connivance of Mr. Bosch to the alleged cartel.
15.4.6 The single WhatsApp exchange of November 2017 between Mr. Steven Bosch and
Mr. Ben Verhaert, Head of India Operations, at AB InBev, recovered from Mr.
Steven Bosch's iPhone, has been misconstrued by the DG. The industry matter
referred to in the said communication was around issues regarding the applicability
of GST on contract production units. To explain, the introduction of GST in the
second half of calendar year 2017 led to significant uncertainty for the entire
brewing industry, with varying interpretations around the applicability of GST on
service charge payable to contract production units v. GST payable on brand
owners' profit realised by the brewers from these contracts. Hence, the (extent of)
GST to be levied on the contract units was a relevant topic for OP-1 and AB InBev
as both made use of contract production units for their respective Beer production
in India. Mr. Steven Bosch has clearly explained that apart from this
intent/purpose, there was no other intended motive/intention to discuss any other
topic with Mr. Ben Verhaert. Further, no actual meeting ever took place between
Mr. Steven Bosch and Mr. Ben Verhaert in furtherance of such communication, as
Suo Motu Case No. 06 of 2017 28
such there could also have been no AAEC anyhow. Yet, the DG has misconstrued
the above WhatsApp exchange as being an attempt on part of Mr. Steven Bosch to
"coordinate with him on an industry related matter" and "an attempt to have
contacts with Mr. Ben Verhaert". The DG could have sought clarification from Mr.
Ben Verhaert in explaining the context of the concerned WhatsApp message;
however, it failed to do so.
15.4.7 Without prejudice to the submissions made above, in the event that the
Commission differs from such submissions, as a lesser penalty applicant, Mr.
Steven Bosch deserves 100% reduction in penalty. Through his lesser penalty
application, Mr. Steven Bosch intended to ensure (on a bona fide basis) that the
Commission has complete information, background and context of (i) internal
competition audit (which was ongoing as on the date of the Dawn Raid), (ii)
documents which were seized by the DG (in addition to the context provided in the
DG deposition), and (iii) diligence and steps taken by Mr. Bosch to bring the issue
of a possible competition law violation to the attention of the Board of OP-1 in
September 2018. Mr. Steven Bosch has fully, continuously and consistently co-
operated with Commission; provided vital disclosures/evidence in an expeditious
manner; and taken all diligence measures in OP-1.
15.5 Mr. Kiran Kumar, Chief Sales Officer of United Breweries Limited
15.5.1 An officer can only be held liable under Section 48(2) of the Act once the company
is found to be in contravention of the provisions of the Act.
15.5.2 Relying on submissions made on behalf of OP-1, it was submitted that the DG has
proposed liability on Mr. Kumar under Section 48(2) of the Act, disregarding the
factual scenario and market realities which have been presented and explained in
detail by Mr. Kumar and by OP-1 and its other employees. The DG has relied upon
the statements of Mr. Kumar without considering the context provided by Mr.
Kumar while making the statements. The DG has not tried to understand the
context in which the information exchange amongst the OPs took place. Mr.
Kumar had categorically explained that discussions amongst competitors took
place only to represent industry specific matters before the State Governments and
Suo Motu Case No. 06 of 2017 29
State Corporations. There was no AAEC in the present case. The DG concluded
each act of information exchange/discussion to be illegitimate in complete
disregard of the evidence brought on record.
15.6 Mr. Perry Goes, Head of Strategic Planning & Analytics at United Breweries Limited
15.6.1 An officer can only be held liable under Section 48(2) of the Act once the company
is found to be in contravention of the provisions of the Act.
15.6.2 The DG Report is in violation of the principles of natural justice in relation to the
findings against Mr. Goes under Section 48(2) of the Act. The DG did not grant
Mr. Goes an opportunity to present his defense during investigation.
15.6.3 Mr. Goes was marked in all the communications related to industry issues which
OP-5 was representing before the Government Authorities, as he was tasked with
representing OP-1 at OP-5. All communications wherein Mr. Goes is marked as
well as communications of Mr. Goes with Mr. Sovan Roy of OP-5 must be seen in
this light.
15.7 Anheuser Busch InBev SA/NV (Includes Crown Beers India Private Limited and
SABMiller India Limited) (AB InBev/OP-2 and OP-3)
15.7.1 AB InBev provided full, true and vital disclosures in compliance with Section 46
of the Act leading to formation of prima facie view by the Commission and
therefore, it deserves 100% reduction in penalty being the first lesser penalty
applicant. It provided irrefutable evidentiary proof of existence of cartel conduct in
various territories of India including internal documents stating overall alignment
with competitors, e-mail communication with competitors and internally within
SABMiller employees showing clear exchange of commercially sensitive
information, communications relating to Government/Statutory Authorities on
change of prices/duties imposed on Beer, communication showing WhatsApp
group of members of Karnataka Brewers' and Distillers' Association, exchange of
e-mails with Excise Authorities, and Affidavits of employees of AB InBev and
SABMiller admitting to the cartel conduct. This helped not only the Commission in
forming the prima facie view but also the DG in conducting search and seizure
Suo Motu Case No. 06 of 2017 30
operations. A lot of major conclusions drawn by the DG are based on the evidences
provided by AB InBev. The assistance provided by AB InBev helped the DG find
contravention of the provisions of the Act against all the OPs.
15.7.2 As a lesser penalty applicant, AB InBev also provided the names of cartelising
individuals to the DG which helped the DG in finding targeted evidence from the
premises of the OPs during its search and seizure operation. Further, the
information provided in lesser penalty application by AB InBev also enabled the
DG to confront deponents with smoking gun evidence to obtain their confessions
despite initial evasive replies. Also, though OP-5 denied having a role in the cartel
conduct, the DG has been able to demonstrate its involvement through various
documentary evidences, as AB InBev, as part of its lesser penalty application, had
described the role of OP-5 as a platform of sensitive commercial information
exchange.
15.7.3 As a lesser penalty applicant, AB InBev fulfilled all conditions prescribed under
law for grant of lesser penalty including ceasing to participate in cartel conduct
pursuant to filing of lesser penalty application, providing vital disclosures,
providing all relevant information, documents and evidence as required by the
Commission, co-operating genuinely, fully, continuously and expeditiously
throughout the investigation and other proceedings before the Commission and not
concealing, destroying, manipulating or removing any relevant documents.
15.7.4 Besides filing lesser penalty application, AB InBev also initiated internal definitive
corrective administrative and HR measures like seeking resignations of certain
employees and initiating re-assignment of roles of remaining employees. AB InBev
also initiated widespread compliance programs for its employees.
15.8 Mr. Shalabh Seth, Chief Supply Officer of United Breweries Limited, former
Managing Director of SABMiller India Limited and former Chairman of All India
Brewers' Association
15.8.1 Mr. Shalabh Seth, currently an employee of OP-1, was employed at OP-3 during
the time he participated in the alleged co-ordination and when Mr. Seth approached
Suo Motu Case No. 06 of 2017 31
the Commission as a lesser penalty applicant, the Commission granted to him, the
same priority status as granted to OP-3.
15.8.2 As part of its lesser penalty application and depositions before the DG, Mr.
Shalabh Seth has provided certain vital additional evidence which added
significant value to the DG's investigation and to the evidence that was already in
possession of the Commission/DG. Such significant additional value is evident
from the fact that during the depositions of the representatives of other players
involved in the co-ordination, the DG has extensively referred to/relied upon the
documentary evidence submitted by Mr. Shalabh Seth as part of his lesser penalty
application as well as the statements made during his depositions before the DG.
15.8.3 Other submissions made by Mr. Shalabh Seth were common with OP-1, i.e. (i)
highly regulated nature of Beer industry, (ii) vigorous competition on other aspects
except joint efforts to persuade or lobby with the State Governments on the
regulatory issue of prices, (iii) non-implementation and no/limited impact on
market, and (iv) no AAEC.
15.8.4 For penalty purposes, if any, to be imposed, the Commission may take into
consideration the income details of Mr. Shalabh Seth for three FYs prior to the last
FY in which Mr. Shalabh Seth participated in the contravention on behalf of OP-3,
i.e., FY 2013-14, FY 2014-15 and FY 2015-16 and not FY 2016-17, FY 2017-18
and FY 2018-19. Reliance on current year's financial figures could lead to an
inequitable treatment. Mr. Shalabh Seth has left OP-3 in October 2016 and joined
OP-1 in July 2018; as such, in fact, he was not working in the Beer industry from
October 2016 to June 2018.
15.9 Mr. Nilojit Guha, Former Director (Sales) at SABMiller India Limited
15.9.1 Mr. Nilojit Guha is not contesting the DG's finding of contravention of the
provisions of Section 3 of the Act or the DG's finding against him under Section
48(2) of the Act. However, he ought to be exonerated and be granted full benefit of
the co-operation extended by him to the DG. He provided detailed description of
the cartel including the modus operandi, aim of the cartel, role of parties, and
Suo Motu Case No. 06 of 2017 32
further explained/corroborated all the e-mails and evidence put against him, in his
deposition recorded before the DG, thereby providing full, true and vital
disclosures. His statement with regard to the e-mails and evidence put to him has
added significant value to the DG's investigation. Mr. Guha co-operated genuinely,
fully, continuously and expeditiously in the investigation. The DG, while arriving
at findings in the DG Report, has extensively relied upon the statement of Mr.
Nilojit Guha.
15.9.2 Mr. Guha ceased to have any participation in the cartel with effect from 16.11.2016
since he had left OP-3 on 15.11.2016. He is a one-time offender and was not acting
for any personal gain.
15.10 Mr. Suryanarayana Diwakaran, Former Vice-President (Sales) at SABMiller India
Limited
15.10.1 Mr. Diwakaran does not dispute any finding of the DG and Mr. Diwakaran, being
an ex-employee of OP-3, seeks to adopt and obtain the benefit of all co-operation
extended by OP-3 to the DG and the Commission.
15.10.2 Mr. Diwakaran was not summoned by the DG for recording of his statement. This
establishes that the role of Mr. Diwakaran was not pivotal in the alleged anti-
competitive agreement.
15.10.3 Mr. Diwakaran ceased to have any participation in the cartel with effect from
15.11.2016 since he had left OP-3 on 15.11.2016. Further, throughout his
employment, Mr. Diwakaran never held any position of influence at OP-3 and was
only acting upon the instructions of his seniors. He is a onetime offender and was
not acting for any personal gain.
15.10.4 Mr. Diwakaran has not received any remuneration from OP-3 after his resignation
on 15.11.2016 and as such, the income earned by him post such date ought not to
be considered by the Commission in case penalty, if any, is imposed.
Suo Motu Case No. 06 of 2017 33
15.11 Mr. Anil Arya, Former Director (Solutions) at SABMiller India Limited
15.11.1 Mr. Anil Arya agrees with the finding of the DG that there was an agreement to fix
prices between the Beer manufactures. He was aware of such conduct and co-
operated during the internal fact-finding exercise conducted by AB InBev.
However, Mr. Arya was not the decision-making Authority or pivotal in the
functioning of this cartel arrangement. The same is evident from the fact that the
DG has not found many e-mails which involved Mr. Arya. In the e-mails dated
22.12.2011 and 09.08.2013, Mr. Anil Arya is only CC'd while with respect to e-
mails exchanged in September, 2011, though the same do suggest exchange of
'price card', however, at the relevant time, it was considered an industry practice in
the interest of consumers to ensure that the prices of products are not prejudicially
determined by the Government on any issue that concerns the consumers as well as
the interest of the Excise Revenue. Mr. Anil Arya has not deliberately or
intentionally participated in the cartel arrangement which violated the law.
15.11.2 Any immunity granted to AB InBev for co-operation accorded to the investigation
process may also be extended to Mr. Anil Arya.
15.12 Carlsberg India Private Limited (OP-4)
15.12.1 Arbitrary and unpredictable actions of the State Excise Authorities - Prices of Beer
are fixed by State Excise Authorities from time to time. No Beer company can
freely change the price of Beer in any State without obtaining prior approval from
the respective State Excise Authority. This requirement of obtaining approval
applies to every State, irrespective of the route-to-market models. In the Free
Market States, price increase proposals are made by the Beer companies, which
must be accepted by the State Excise Authorities before they can be implemented
in the market. In other markets, seeking a price increase is a significant challenge
given that the Beer manufacturers are dealing with a monopsonist, i.e., the State
Government (dealing directly or through State Corporations). Therefore, there is
hardly any pricing power with the OPs, and the price revisions are mostly triggered
by the revision in Excise duty by the State Excise Authorities, and not pursuant to
price increase requests made by the brewers. In other words, the ultimate and true
Suo Motu Case No. 06 of 2017 34
driver of revisions in Beer prices is the State Excise Authority and not the brewers,
and thus, it is virtually impossible for the OPs to restrict price competition in this
market. Accordingly, any possible adverse impact on the market is not on account
of the conduct of the OPs, but it is because of the actions of the State Excise
Authorities.
15.12.2 No AAEC - The OPs are forced to come together through OP-5, because the State
Excise Authorities would not interact with the companies individually. The OPs'
actions have been purely to survive and in fact have resulted in benefit for the
consumer at large. As such, the conduct of OP-4 was only with a view to sustain its
operations in the market and had no AAEC in any manner, whatsoever. In fact, its
conduct led to consumer benefit in terms of lower prices. If OP-4 (and other Beer
companies) had not approached OP-5 and made unified representations to the State
Excise Authorities to voice their concerns, it would have had serious negative
consequences for the already financially pressurised Beer industry in India, and
may also have had an overall impact on employment, income and foreign
investments in India. As such, OP-4's conduct was not aimed at affecting the
market but was to merely represent genuine concerns before the State Governments
and/or the State Excise Authorities to amend policies for the benefit of the overall
Beer market and the consumers.
15.12.3 Price Fixing - The DG has concluded that OP-1, OP-3 and OP-4 had indulged in
price fixing. In particular, the DG finds that the anti-competitive conduct took
place primarily in 13 States/UTs out of the total 36 States/UTs in India. However,
with respect to OP-4, the DG Report does not disclose any credible evidence for 7
States/UTs and the evidence relied upon by the DG in relation to the State of
Rajasthan and the UT of Delhi also does not demonstrate OP-4's involvement in
the illegal price fixing. The DG Report hence, contains evidence of OP-4's
involvement in illegal price fixing in only 4 States/UTs. Further, the actual
implementation of pricing discussions took place only for a short time period and
only at 8 instances in these 4 States/UTs: (i) Maharashtra (one instance in 2016),
(ii) West Bengal (four instances - one each in 2012, 2015, 2016 and 2017), (iii)
Suo Motu Case No. 06 of 2017 35
Karnataka (two instances - one each in 2015 and 2017), and (iv) Puducherry (one
instance in 2017).
15.12.4 Limiting/Restricting supplies - The DG has found that OP-1, OP-3 and OP-4 had
collectively decided upon the strategy to oppose certain Government policies
(including fixation of prices). The DG has stated that in a few cases, whenever the
State Governments hiked the Excise duty, the Beer companies collectively decided
to limit production and supplies in contravention of Section 3(3)(b) of the Act.
Whilst the findings of the DG are in line with OP-4's lesser penalty submissions,
its conduct should be viewed in light of the following events, which were
implemented with immediate effect:
(i) Maharashtra: The arbitrary increase in the Excise duty (because of a
calculation error) which would have resulted in an exorbitant increase in the
Beer price in Maharashtra by 30%, i.e., from ₹145 for the TBS 650ml bottle to
over ₹190 per bottle; and
(ii) West Bengal: The arbitrary increase in Excise duty in West Bengal which
would have resulted in an exorbitant increase in the Beer price by over 80%,
i.e., from ₹110 per bottle to over ₹200 per bottle
It is with this background that the OPs took the decision to jointly approach the
respective State Governments to convince them to revise the Excise policies,
absent which the industry would have otherwise collapsed. In fact, any
representation made individually by any party would not have been entertained by
the Authorities. Such arbitrary and overnight price increases implemented by the
State Excise Authorities impaired the ability of the Beer companies to supply Beer.
In addition to rendering the selling price economically unviable, such sudden
exorbitant prices would have resulted in wastage/destruction of the entire stock
carrying labels with higher MRP, leading to huge losses for the Beer companies if
the State Excise Authorities were to subsequently roll back the duty/rectify the
error resulting in a lower MRP. It is only because of these joint representations that
the State Governments agreed to fix or revise the Excise calculations, which
ultimately resulted in lower prices for the consumers. As such, the pro-competitive
effects of such conduct on the Beer market in the longer run (i.e., lower prices of
Suo Motu Case No. 06 of 2017 36
Beer) outweighed any effects of a limited and temporary curtailment of supply in
the market.
15.12.5 Sharing of Stock and Sales Data - The DG has concluded that OP-1, OP-3 and OP-
4 were sharing their periodical sales and stock data with each other in order to
calculate and monitor each other's market shares, in violation of the provisions of
Section 3 of the Act. The evidence primarily relates to the city of Aurangabad.
However, the DG has failed to address how this finding is a contravention of the
provisions of the Act. OP-4 was never questioned about this evidence or asked to
explain the context thereof. The DG has failed to appreciate that the evidence
relied on by it pertains only to collecting such data pursuant to/at the instance of
the Excise Authorities' directions, and was not with any intent to monitor market
shares. In the Corporation Market States, the Corporation itself publishes the
market information which can be accessed on their portals. Thus, the DG has
arrived at a conclusion without putting the evidence to the company/persons
allegedly involved and has not discharged the burden of proof in establishing how
this conduct amounts to a contravention of the provisions of the Act.
15.12.6 Cartel in the purchase of second-hand bottles - The DG has concluded that OP-1
and OP-3 had: (i) exchanged information regarding the volume and prices of the
second-hand bottles each would procure from bottle collectors; and (ii) reached an
understanding to share their off-take of old Beer bottles from the market, for re-use
in their breweries. The evidence relied on by the DG does not involve or implicate
OP-4 in any way for the said violation. However, the DG casually makes OP-4 also
liable for such conduct based on the statement of Mr. Shekhar Ramamurthy of OP-
1 that such co-ordination took place between OP-1, OP-3 "and perhaps CIPL"
which is not corroborated by any evidence.
15.12.7 OP-4 hence, played a very limited role in the illegal conduct described in the DG
Report. Its involvement in the price fixing conduct was limited to only 4 States
(viz., Maharashtra, West Bengal, Karnataka and Puducherry) and limiting supply
conduct was limited only to 3 States (Maharashtra, West Bengal and Odisha),
thereby making a total of 5 States/UTs where anti-competitive conduct may have
Suo Motu Case No. 06 of 2017 37
taken place. Further, the finding in the DG Report that the illegal conduct took
place in the domestic Beer market in India during the period from 20.05.2009 to
10.10.2018, does not specify that OP-4's participation was much more limited and
started only from 2012 onwards.
15.12.8 Penalty and relevant turnover/profit - In the event the Commission deems it
necessary to impose a penalty on OP-4 based on its turnover/profit, such penalty
should be only on the relevant turnover/profit of OP-4, i.e., the turnover/profit
derived from the sale of the relevant product, in the relevant time period/duration,
and in the relevant States/UTs in India. The relevant turnover (or profit) under
Section 27 of the Act should be limited to the States where there is evidence of an
infringement, which in the present case would be the 5 States/UTs of Odisha,
Karnataka, West Bengal, Maharashtra and Puducherry. If pan India turnover/profit
is used when calculating penalties, it would lead to disproportionate and
inequitable results. Further, the Commission should impose penalties, if any, based
on the relevant duration, i.e., the duration of OP-4's participation in the
infringement (i.e., wherein discussions/conduct resulted into implementation) in
each of the relevant states. The date of the first anti-competitive contact/conduct
for which there is evidence concerning OP-4 should be taken as the
commencement date of OP-4's participation in the infringement. Further, the
Commission should take the date of the last anti-competitive contact by OP-4 for
which there is evidence as the end date of OP-4's participation in the infringement
in each of the relevant states. The DG has incorrectly concluded that OP-4's
conduct started in 2009. It is clear from the evidence that OP-4's conduct only
began from 2012 and was limited to specific time periods, that too in limited states.
15.12.9 Mitigating Factors - In the event the Commission deems it necessary to impose a
penalty, it ought to apply the lowest percentage/factor to the relevant
turnover/profit, in arriving at the penalty to be imposed on OP-4, taking the
following circumstances into account:
(i) The true driver of price revisions was the State Governments/Corporations and
not the brewers. The requirement of the State Governments to not entertain
individual representations by a specific Beer company on industry issues
Suo Motu Case No. 06 of 2017 38
rendered it necessary for the Beer companies to make representations
collectively and/or through OP-5. Co-ordination by OP-4 was not undertaken
with any intent to capitalise on consumers but with a limited purpose to
preserve its already marginalised profits, and in some instances, to merely
recover its costs.
(ii) The scope of OP-4's participation in the anti-competitive behaviour was
limited. Not all pricing discussions for which evidence has been submitted by
OP-4 were actually implemented by OP-4. The actual implementation of
pricing discussions was only in the States of: (i) Maharashtra (one instance in
2016), (ii) West Bengal (four instances - one each in 2012, 2015, 2016 and
2017), (iii) Karnataka (two instances - one each in 2015 and 2017), and (iv)
Puducherry (one instance in 2017).
(iii) OP-4 is a first-time offender of competition law. It is also not a major market
player in the Beer industry. OP-4's management has tried to ensure an
environment of strict compliance of competition law and general regulatory
compliance and will continue to make such efforts to strengthen compliance
amongst its employees.
(iv) Beer industry in India has been severely impacted by the global COVID-19
pandemic, and the subsequent lockdown announcements and social distancing
norms. Sales reduced and duties increased. During January 2020 to October
2020, OP-4's sales in volume have declined by 41%, and its net sales revenue
have declined by 35.8%, from the previous year. Further, OP-4 has a net loss-
making business with a loss in terms of Earnings before interest and taxes
('EBIT') of approximately ₹175 million. To stay afloat, OP-4 had to
undertake a major restructuring which has resulted in job loss of 315
employees by the end of this year. Further, Beer has a limited shelf life, and in
anticipation of the peak demand months (which also co-incided with
lockdowns in India), OP-4 had manufactured large volumes of Beer. These
had to be destroyed, which in turn led to heavy losses for OP-4, to the tune of
₹450-470 million in 2020. In light of the serious repercussions that the
pandemic has had on OP-4 so far and is expected to continue to have over the
Suo Motu Case No. 06 of 2017 39
coming months, any level of penalty will put an additional significant financial
burden on the company.
15.12.10 Reduction under LPR - OP-4 has fully complied with the conditions stipulated in
Regulation 3 of the LPR. It has made all possible efforts to not only determine and
understand the nature of the conduct but also ensured that the conduct is stopped
immediately. Furthermore, OP-4 has provided all relevant information, documents
and evidence and has co-operated genuinely, fully, continuously and expeditiously
throughout the process. Not only did OP-4 promptly file lesser penalty application
and provide all necessary details but it also provided significant added value
evidence that has enhanced the ability of the DG to establish the existence of anti-
competitive behaviour. This is clear from the fact that more than half of the
evidence relied on by the DG in the DG Report has been provided by OP-4.
Several additional evidences provided by OP-4 have not been used or relied upon
by the DG in reaching to its findings; nevertheless, they constitute value addition
on part of OP-4.
15.13 Mr. Michael Jensen, Former Managing Director of Carlsberg India Private Limited
15.13.1 All submissions to the extent they relate to evidence involving Mr. Michael Jensen
and submissions on penalty and mitigation made by OP-4 in its response to the DG
Report are adopted by Mr. Jensen.
15.13.2 Mr. Jensen agrees with the findings of the DG against him. However, in relation to
the co-ordination on pricing in West Bengal in 2012, Mr. Jensen submits that he
was merely a consultant at OP-4 during this period, and had no Authority to make
any key decisions at OP-4.
15.13.3 With respect to the involvement of Mr. Jensen found in the alleged anti-
competitive conduct in Rajasthan, it may be noted that there has been no AAEC.
The entire e-mail evidence relied on by the DG to find a violation in Rajasthan
relates to a period between 2015 and 2016. However, since 2015 till recently in
2019, the Beer companies did not get any price increase based on a price increase
Suo Motu Case No. 06 of 2017 40
request made by them. All price increases have been a result of changes in the tax
structure in Rajasthan only.
15.13.4 With respect to Delhi also, Mr. Jensen had no role in the discussions and did not
participate in any interactions with competitors. He was only CC'd in the e-mails
exchanged. In any event, there was no implementation in Delhi as the Delhi
Government did not accept the price increase request.
15.13.5 Mr. Jensen extended full and continuous cooperation throughout the course of the
investigation. He is a part of OP-4's lesser penalty application. The DG has
extensively relied on the deposition of Mr. Jensen throughout the DG Report,
which shows his value addition to the DG's investigation process.
15.14 Mr. Nilesh Patel, Managing Director of Carlsberg India Private Limited
15.14.1 All submissions to the extent they relate to evidence involving Mr. Nilesh Patel
and submissions on penalty and mitigation made by OP-4 in its response to the DG
Report are adopted by Mr. Patel.
15.14.2 Mr. Patel was appointed as the Managing Director of OP-4 only from 26.04.2018,
and therefore, had no executive decision-making role/responsibility at OP-4 prior
to this date. Prior to this, Mr. Patel was not involved in handling the day-to-day
affairs of OP-4 and was not taking any key decisions. On 05.05.2017, Mr. Patel
was nominated by Carlsberg Breweries A/S as a Director at OP-4 Board.
Therefore, his involvement in the functioning of OP-4 (until 26.04.2018) was as
Asia region support and very limited, and he did not have any executive Authority.
Mr. Patel was a nominee Director from Carlsberg Breweries A/S as part of the joint
venture arrangement at the Carlsberg South Asia Pte. Ltd. level and was involved
in OP-4's affairs in a non-executive capacity.
15.14.3 The evidence relied upon by the DG to find Mr. Patel liable pertains to the period
prior to him being appointed as the Managing Director of OP-4, i.e., before
26.04.2018. Post this date, OP-4 has not engaged in any anti-competitive conduct.
It was only out of abundant caution that Mr. Patel was named as one of the persons
for whom OP-4 sought lesser penalty under the lesser penalty application filed by
Suo Motu Case No. 06 of 2017 41
it. However, no penalty should be imposed on Mr. Patel, given that during the
period of anti-competitive conduct by OP-4, Mr. Patel was not the Managing
Director of OP-4, and accordingly, did not have the Authority to take any key
decisions at OP-4.
15.14.4 Mr. Patel had no decisive role to play in relation to curtailing the supply of Beer in
West Bengal, Also, he had simply made suggestions to address the issue of
increase in Excise duty in West Bengal.
15.14.5 There is also no evidence to show that Mr. Patel took any decision to co-ordinate
with OP-1 to curtail the supply of Beer in Maharashtra.
15.14.6 Mr. Patel has never met and does not know Mr. Shalabh Seth of OP-3 (now of OP-
1). Mr. Patel had never interacted with Mr. Seth, and there is no evidence
indicating that there was any communication between them. Therefore, Mr. Seth's
deposition against Mr. Patel should not be considered.
15.14.7 Mr. Patel was one of the key personnel at OP-4 who drove the process of internal
investigation at OP-4, pursuant to the Dawn Raid, which made it possible for OP-4
to participate in the lesser penalty process and provide evidence to the DG. He
even initiated competition compliance programs at OP-4.
15.14.8 Mr. Shekhar Ramamurthy of OP-1 stepped down as the Chairman of OP-5 on
27.07.2018 and Mr. Patel was selected as the Chairman on 27.07.2018. Mr. Patel
stepped down as the Chairperson of OP-5 on 29.10.2018 after the Dawn Raid.
15.14.9 Computation of penalty, if any imposed, on Mr. Patel, should be based on the
income derived by him from his association with OP-4 rather than his total income
or his income derived from previous employments.
15.15 Mr. Pawan Jagetia, Former Deputy Managing Director of Carlsberg India Private
Limited
15.15.1 Mr. Pawan Jagetia has no objections to the DG's findings in relation to the anti-
competitive agreement amongst the OPs.
Suo Motu Case No. 06 of 2017 42
15.15.2 However, with respect to Mr. Jagetia, the DG Report provides no evidence to
support the conclusion that Mr. Jagetia was involved in the pricing decisions of
OP-4. The DG has relied on the statements of only two interested witnesses viz.,
Mr. Nilesh Patel and Mr. Michael Jensen, whose credibility is in question, to reach
such conclusion. While placing reliance on the statements of such interested
witnesses, the DG has ignored the statements given by Pawan Jagetia that as
Deputy Managing Director of OP-4, he was only in-charge of supply chain and
business development. This is also evident from the employment contract and
organisational structure of OP-4. Moreover, the evidence on record clearly shows
that Mr. Michael Jensen, Managing Director was the sole Authority taking all
decisions relating to pricing. Most significantly, the DG has completely failed to
consider that the evidence proving price fixation by OP-4 does not include Mr.
Pawan Jagetia (either as sender, recipient or even CC'd in e-mails).
15.15.3 It may be noted that Mr. Pawan Jagetia's ability to reply to the DG Report and
defend himself is seriously limited by the lack of information in his professional e-
mail account, which OP-4, citing false reasons, has refused to supply to him. The
same, if available, would show that no pricing related decisions were taken by Mr.
Jagetia. Absent the same, the evidence which would have corroborated Mr.
Jagetia's claims cannot be provided to the Commission.
15.15.4 Mr. Nilesh Patel's credibility is under challenge as he has also made intentional
misrepresentation before the DG stating that he was the Managing Director of OP-
4 since April/May 2018, though he was the de facto Managing Director of OP-4
without OP-4's Board approval, from May 2017.
15.15.5 The DG Report fails to establish any impermissible communication between Mr.
Pawan Jagetia and OP-4's competitors. The evidence on record does not establish
that Mr. Pawan Jagetia was involved in any activity including discussion of prices
that was in furtherance of the alleged cartel. The DG has concluded Mr. Pawan
Jagetia's role in exchanging commercially sensitive information based on certain e-
mail communications. However, these e-mails either pertain to i) permissible
communication between competitors regarding change of State policy; or ii)
Suo Motu Case No. 06 of 2017 43
internal decisions taken by OP-4 in response to the market conditions which
included no pricing information. The counterparts of the competing entities
involved in the conduct also do not name Mr. Pawan Jagetia as a person with
whom they had interactions in relation to price.
15.15.6 Without prejudice to the above and even assuming that the evidence indicated
exchange of information pertaining to price by Mr. Jagetia, the same did not lead to
any fixation of price. Since the communications were not 'acted upon', it cannot
amount to a violation of the provisions of Section 3 of the Act. Consequently, Mr.
Jagetia's conduct does not render him liable under Section 48(2) of the Act.
15.15.7 The DG Report fails to establish either consent, connivance or neglect on part of
Mr. Pawan Jagetia to establish his liability under Section 48(2) of the Act. In fact,
the evidence on record demonstrates that Mr. Pawan Jagetia was unaware of the
cartel activity, and his role in supply and business development implied that he
wasn't involved in the pricing decisions of OP-4.
15.15.8 Without prejudice, in case the Commission were to find Mr. Jagetia guilty and
impose penalty on him, the following mitigating factors ought to be considered
before determining the quantum of penalty:
(a) Mr. Jagetia had a limited role in OP-4 as Deputy Manging Director of the
company. He was not involved in the key decisions of the company - decisions
regarding products of OP-4, including their price did not require the
involvement of Mr. Pawan Jagetia.
(b) Mr. Jagetia has extended full and complete co-operation during the
investigation in the matter.
(c) OP-4 has filed an application under Section 46 of the Act read with the LPR
seeking reduction in penalty imposed on it as well as its individuals. In line
with the Commission's decisional practice, benefit, if any, extended to OP-4,
must also be extended to the individuals employed by OP-4 in the said
duration, including to Mr. Pawan Jagetia.
Suo Motu Case No. 06 of 2017 44
15.15.9 Computation of penalty, if any imposed, on Mr. Jagetia, should be based on the
income derived by him from his association with OP-4 rather than his total income.
15.16 Mr. Dhiraj Kapur, Vice-President (Corporate Affairs) of Carlsberg India Private
Limited
15.16.1 All submissions to the extent they relate to evidence involving Mr. Dhiraj Kapur
and submissions on penalty and mitigation made by OP-4 in its response to the DG
Report are adopted by Mr. Kapur.
15.16.2 With respect to the involvement of Mr. Kapur found in the alleged anti-competitive
conduct in Rajasthan, it may be noted that there has been no AAEC. The entire e-
mail evidence relied upon by the DG to find a violation in Rajasthan relates to a
period between 2015 and 2016. However, since 2015 till recently in 2019, the Beer
companies did not get any price increase based on a price increase request made by
them. All price increases have been a result of changes in the tax structure in
Rajasthan only.
15.16.3 With respect to State of West Bengal, Mr. Kapur had no role in the discussions and
did not participate in any interactions with competitors. He was only CC'd in the e-
mails exchanged.
15.16.4 With respect to Delhi also, Mr. Kapur had no role in the discussions and did not
participate in any interactions with competitors. He was only CC'd in the e-mails
exchanged. In any event, there was no implementation in Delhi as the Delhi
Government did not accept the price increase request.
15.16.5 With respect to fixation of EBP and MRP, Mr. Kapur's role, as the Vice-President-
Corporate Affairs, was limited to co-ordinating with OP-5 and Government
agencies for seeking price revisions and favourable policy decisions, and Mr.
Kapur was not responsible for fixation of EBP or MRP for OP-4's Beer products.
15.16.6 Mr. Kapur provided continuous and full co-operation throughout the investigation.
He also forms part of the lesser penalty application filed by OP-4.
Suo Motu Case No. 06 of 2017 45
15.16.7 Computation of penalty, if any imposed, on Mr. Kapur, should be based on the
income derived by him from his association with OP-4 rather than his total income.
15.17 Mr. Anil Bahl, Vice-President (Mont and Premium Business) and Former Sales
Director of Carlsberg India Private Limited
15.17.1 All submissions to the extent they relate to evidence involving Mr. Anil Bahl and
submissions on penalty and mitigation made by OP-4 in its response to the DG
Report are adopted by Mr. Bahl.
15.17.2 Mr. Bahl agrees with the findings of the DG against him. However, he was one of
the key persons at OP-4 who provided majority of the evidence, which enabled
OP-4 to file a complete lesser penalty application before the Commission. Mr. Bahl
provided continuous and full co-operation throughout the investigation. He also
forms part of the lesser penalty application filed by OP-4.
15.17.3 Computation of penalty, if any imposed, on Mr. Bahl, should be based on the
income derived by him from his association with OP-4 rather than his total income.
15.18 Mr. Mahesh Kanchan, Vice-President (Marketing) of Carlsberg India Private Limited
15.18.1 All submissions to the extent they relate to evidence involving Mr. Mahesh
Kanchan and submissions on penalty and mitigation made by OP-4 in its response
to the DG Report are adopted by Mr. Kanchan.
15.18.2 During his employment at OP-4, Mr. Kanchan did not participate in any meetings
with his counterparts in any manner to fix prices or curtail supplies and he did not
attend any OP-5 meetings. The evidence relied upon by the DG does not show his
involvement in the cartel in any manner.
15.18.3 Mr. Kanchan had no decisive role in either the decision of OP-4 to curtail or
resume supplies in the States of West Bengal or Maharashtra.
15.18.4 With respect to sharing of information regarding market shares by Mr. Kanchan,
the DG has erred in concluding that OP-4 was privy to sales volumes of its
competitors for it to be able to ascertain their market shares. Market share
Suo Motu Case No. 06 of 2017 46
information is (i) estimated market share, (ii) available in the industry through
market intelligence, and (iii) not indicative of collusion by any means. For
Corporation States, the respective State Beverage Corporation owned by the
Government itself publishes the market shares of all players. As such, e-mail
exchange in this regard is not in violation of the provisions of the Act.
15.18.5 Computation of penalty, if any imposed, on Mr. Kanchan, should be based on the
income derived by him from his association with OP-4 rather than his total income.
15.19 All India Brewers' Association (OP-5)
15.19.1 OP-5 denies each and every allegation levelled against it in the investigation report.
OP-5 has never facilitated any alleged cartel conduct amongst its members. Its
platform has never been used for exchange of any commercially sensitive
information amongst the Beer manufacturing companies or to indulge in any other
anti-competitive conduct.
15.19.2 The DG has not found any evidence of cartel conduct in Auction markets, despite
having conducted extensive raids at the premises of all the OPs and seizing their
laptops, other documents etc., and carrying out in depth investigation. Cartel
conduct/conspiracy is more likely and feasible in Auction markets than in
Corporation and Hybrid markets. Markets such as Corporation and Hybrid
markets, which are tightly regulated, controlled and monitored by the Government
are not the kind of anti-trust markets wherein a price fixing/supply restricting cartel
conduct can typically be found. It is strange, surprising and unsustainable for the
simple reason that the feasibility of success of any conspiracy to get supra-
competitive prices are much higher, easier and probable in Auction markets than in
Corporation and Hybrid markets, as the prices and supplies are totally controlled in
such markets by the State Governments. The DG has not offered any explanation
regarding this incongruity, as to why would the OPs conduct be anti-competitive in
Corporation and Hybrid markets but not in Auction markets.
Suo Motu Case No. 06 of 2017 47
15.19.3 It appears that the DG has neither recorded any statement of any respective Excise
officials nor has it collected any document from the offices of the State
Governments, while investigating into the alleged cartel conduct of the OPs in
Corporation and Hybrid markets. Instead, the DG has interpreted the documents/e-
mails collected from the OPs as per its own will in an arbitrary and unilateral
fashion. In doing so, the DG has ignored the explanations given by OP-5 and other
OPs as regards the conduct of OP-5. Accordingly, the observations of the DG are
not based on any rigorous analysis of facts and are impressionistic/untrue in nature.
The allegations made against OP-5/other OPs, without any corroboration of the
same from the concerned Excise officials, is unsustainable on ground of
incompleteness as all the relevant parties have not been examined.
15.19.4 Though OP-5 was registered in 1977, it remained largely inactive till 2013. OP-5
started functioning only from the year 2013. There is no record available of its
meetings or minutes for the period before 2013 and its registration also lapsed
sometime during the intervening period. OP-5 was revived only on 31.12.2013,
when a Certificate of Registration was issued to it by the District Registrar of
Societies, Bengaluru. Thus, OP-5 is in no position to comment about the
developments during the preceding years. In light of such facts, OP-5 cannot be
alleged to have indulged into any anti-competitive during the period 20.05.2009 to
10.10.2018, as has been alleged by the DG.
15.19.5 OP-5 has acted to protect the collective interest of the Beer industry, contribute to
the economic growth of the country, protect Beer over spirits category, increase
shareholders' value and to ensure that the businesses of its members remain viable.
As an industry association of 14 members (10 of whom are brewers, 2 malsters and
2 can suppliers), OP-5 has never acted in the self-interest of only OP-1, OP-3 and
OP-4 and its role has been truly representational of the collective interest of the
industry, including all its members as well as several other non-members belonging
to the Beer industry.
Suo Motu Case No. 06 of 2017 48
15.19.6 OP-5 was neither involved in any discussion relating to 'prospective quotes' by the
Beer manufacturers nor was it party to any discussions regarding the way forward
with State Excise departments on such 'prospective quotes'. A large number of
individuals whose depositions have been recorded by the DG including Mr.
Shekhar Ramamurthy of OP-1, Mr. Manish Shyam of OP-3, Mr. Debashish
Dasgupta of OP-3, Mr. Ben Verhaert of AB InBev and Mr. Kiran Kumar of OP-1,
have clearly stated that the forum of OP-5 was not used for price fixation. The
statement of Ms. Ritika Verma of OP-5 recorded by the DG has been
misconstrued.
15.19.7 With respect to the State of Rajasthan, it is a matter of record that EBP changes in
Rajasthan were allowed only during the year 2014, upon release of the new liquor
Sourcing Policy, and the EBPs granted in 2014 continued to remain the same
during the entire period of investigation by the DG. The State Government did not
take any action on EBP increase thereafter despite the fact that the Beer
manufacturers were individually submitting their cost increase justification in
accordance with the prescribed format under the Liquor Sourcing Policy of the
Government. The last rate increase (i.e., EBP increase) granted to the industry in
Rajasthan in the year 2013-14, was also eroded in the subsequent year by way of
levy of Bottling Fee which had to be absorbed by the breweries from the EBPs
approved. Thus, during 2016-17, OP-5 represented before the concerned officials
of the State Government, alongwith few of its member companies, to canvass for
implementation of the Liquor Sourcing Policy of the Government and thereby to
grant increase in EBP to the industry, as submitted individually by its member
companies. Three years had passed and three liquor sourcing policies were
announced to submit fresh rates but neither approval nor denial was conveyed. On
the contrary, the Government, while keeping basic EBP same, levied Bottling fee
which the Breweries were forced to absorb from the EBP approved. This Bottling
fee went up from ₹7.80/case to ₹11.80/case to ₹19.50/case in three years. In
meeting with the Principal Secretary Excise, the industry made the point that the
Bottling Fee be re-imbursed as it is over and above the approved price. In fact, re-
imbursement of Bottling Fee was being discussed for many months. In this context,
the DG has completely misconstrued the facts in alleging that OP-5 recommended
Suo Motu Case No. 06 of 2017 49
increase in duty from 146% to 150% with a view to increase the retail prices of
Beer. The fact of the matter is that the aforesaid remark was made by OP-5 in the
context of the revenue loss that the State Government was likely to have faced
upon re-imbursement of Bottling fees. In the meeting with the Beer manufacturers,
a suggestion was given to the State Government to raise Excise duty and allow the
MRP to go up. There would be no change in EBP. There is nothing anti-
competitive in putting forward a suggestion for consideration to the State to recoup
its losses, while putting forward a legitimate demand on behalf of the entire
industry. Therefore, evidently, the DG has inferred price parallelism and 'acting in
tandem' on part of the OPs merely on the basis of identical changes in the MRPs,
and has not examined whether there were any changes in the EBPs. Changes in
MRPs were exclusively on account of changes in Excise duties over the said
period, without any change in the EBPs. Further, EBPs of all Beer manufacturers
were identical at ₹265.43 simply on account of the fact that the State of Rajasthan
grants identical EBPs to the competing brands, based on the lowest rates approved
in any of the neighbouring states or any other State in the country, as per its Liquor
Sourcing Policy. This also explains as to why the competing brands of the spirits
industry also have identical MRPs. The aforesaid fact is easily verifiable from the
website of Rajasthan State Beverages Corporation Ltd. ('RSBCL').
15.19.8 With respect to the State of West Bengal, the role of OP-5 was merely to work
towards rationalisation of duty structure, as the duty on Beer alone (but not for
other spirits category) had been increased by the State Government from 30.1% of
EBP to 45.5% of EBP. Further, since the Beer industry was treated in isolation, as
there were no changes in duty on any other alcoholic beverages, the aforesaid step
of tax increase by the State Government was very harsh for the Beer industry. In
other words, in so far as West Bengal is concerned, OP-5 was simply representing
for tax rationalisation and not for achieving any increase in the EBP prices.
15.19.9 In case of Delhi, the role of OP-5 was merely to seek re-imbursement of costs
involved in 2D scanning bar codes on Beer bottles that was imposed by the
Government in its Excise policy. Further, when the State Government agreed to
grant some re-imbursement in the form of rate increase, OP-5 agitated against
Suo Motu Case No. 06 of 2017 50
discriminatory grant of 3% to Beer industry and 5% to spirits category. Thus, there
was no attempt to get any rate increase, which continued to be based on the lowest
price anywhere in the country as had been approved by the State Government.
15.19.10 In so far as the State of Odisha is concerned, the State Government had arbitrarily
lowered the EBP for Beer manufacturers by 20% compared to the previous year's
purchase prices and had increased Excise duties by upwards of 30%, as per its
policy for 2015-16 which was announced during early March 2015. With
reduction in EBP by 20% and increase in Excise duty by upwards of 30%, it was
impossible to conduct business in a viable manner in the State. Further, the changes
applied even to the existing stocks lying in the Odisha State Beverages Corporation
Limited ('OSBCL') depots. The existing supply contracts of the Beer
manufacturers with OSBCL were only till 31.03.2015 and the Beer manufacturers
were under no contractual obligation to make supplies unless the terms of the new
contract to be executed was mutually acceptable to the parties. Pertinently, OP-5
was not even in the loop regarding the discussions amongst its members to stop
supplies to OSBCL. The State Government had mandated every supplier to execute
the contract with OSBCL by 16.04.2015, failing which the State Government
would initiate action for de-registration. On their part, OP-1, OP-3 and OP-4 wrote
to OSBCL on 16.04.2015 and 17.04.2015 that they would be willing to make
supplies of Beer at last years' price (i.e., 2014-15) and with increased levies as
proposed in the current Excise policy for 2015-16. Simultaneously, the action of
State was also challenged in various writ petitions by the aforesaid OPs and few
other spirits manufacturers and retailers. Thus, from 17.04.2015 till 30.04.2015, the
parties were before the Hon'ble High Court of Odisha, which then passed an
interim order to which all parties including the State complied. There was merit in
the case of the manufacturers as the Hon'ble High Court restored the prices. In any
case, OP-5 was not involved in the legal case/petition at any time. Apparently, the
parties did not want to weaken their case before the Hon'ble High Court by making
supplies in the meanwhile in terms of the new policy under challenge. Thus, it is
absolutely incorrect to view the refusal to make supplies by OP-1, OP-3 and OP-4
as being in violation of the provisions of Section 3(3)(b) of the Act, as the conduct
was not motivated with any view to fix prices/increase EBPs. Thus, no meaningful
Suo Motu Case No. 06 of 2017 51
anti-trust sense can be attributed to the conduct of the OPs, as the decision not to
make supplies was a direct fallout of the arbitrary nature of State action which
made their businesses unviable, lapse of contract with OSBCL and pendency of
writ petition before the Hon'ble High Court.
15.19.11 The Act does not prohibit collective representations before the appropriate State
Government Authorities, more so in a market that is completely regulated, for
grant of fair prices as provided in the policy/tax rationalisation etc.
15.19.12 The DG has not found that the basic price (i.e., EBP) being demanded by the OPs,
let alone achieved, on account of their alleged co-ordination, were unfair or supra-
competitive prices. It is a matter of record that the EBPs granted by the States did
not change for years together, despite inflationary and other increases in costs for
the Beer manufacturers, which the DG ought to have verified from the records of
the State Government. In the absence of any fact on record that basic prices being
demanded collectively were unfair or supra-competitive, or were granted, it cannot
be assumed that the OPs indulged in any conduct that violated the provisions of the
Act.
15.19.13 The DG has also failed to bring out the fact that OP-5's role as an industry body
has always been ex-post rather than ex-ante of the submissions made by the Beer
manufacturers to the State Government. OP-5 has neither been privy to the
determination of EBP of its respective members nor to the submissions made
directly and individually by the respective Beer manufacturers for approval to the
State Governments.
15.19.14 The DG has also completely ignored and overlooked the fact that examination of
relevant facts by the State Governments is very prolonged and protracted. It would
be preposterous to assume that by their collective action through OP-5, the OPs
could hoodwink/cajole/dominate the State Governments into granting them higher
prices. Thus, the allegation that the likelihood of getting uniform price increase
collectively was much higher than applying individually for different prices is a
mischaracterisation of facts. The same does not amount to violation of the
provisions of Section 3(3)(a) of the Act.
Suo Motu Case No. 06 of 2017 52
15.19.15 The DG has also overlooked the fact that the officials of the State Governments
preferred to interact with the Beer manufacturers through the forum of OP-5, so as
not only to get industry perspective as a whole but, more importantly, for not being
seen as favouring any company in their individual demand for revision of prices.
15.19.16 The DG has also failed to observe that notwithstanding similar MRPs, the effective
transaction prices for the Beer manufacturers have not been same. This is on
account of fierce competition amongst the Beer manufacturers/brands. Different
brands offer different levels of retail trade discounts/schemes, such as happy hours,
other consumer promotion schemes etc. which result in effective transaction prices
or the prices at which trade buys competing brands, being different for the Beer
manufacturers. The DG has also not examined the fact that the brands/OPs
compete fiercely in sale of their volumes by adopting innovative measures to bring
in production and distribution efficiencies and pursuing other innovative ways to
promote sale of their brands. Thus, it is evident that the DG has looked at facts
selectively and with a prosecution bias. The DG has not looked at the entire mosaic
of facts before it in a holistic manner to ascertain whether the alleged anti-
competitive conduct of the OPs fitted in well with their overall conduct. In the
absence of the same, the conclusions drawn by the DG against the OPs cannot be
treated as consistent, credible or reliable. Thus, the observations of the DG
regarding allegation of anti-competitive conduct against OP-5, and its members,
are liable to be rejected in toto.
15.20 Mr. Sovan Roy, Director General of All India Brewers' Association
15.20.1 Reply filed by OP-5 is adopted.
15.20.2 OP-5 has always emphasised highest respect for the law, and discussions have
taken place on the belief that conduct of collective representation does not violate
the provisions of the Act, in as much as the data being shared is not competitively
business sensitive information and the same is publicly available on the websites of
the State Corporations and that there was a pressing need to impress upon the State
Government Authorities to implement their own Excise policies and to rationalise
duty structures so that the Beer industry does not suffer or is discriminated against.
Suo Motu Case No. 06 of 2017 53
15.20.3 Mr. Sovan Roy is a paid employee of OP-5 and does not stand to gain by any direct
or indirect violation of the law. Thus, he has no vested and/or any personal interest
in the matter. He merely executed responsibilities under the directions of the Board
of OP-5, which it verily believed to be legal and dutiful.
15.20.4 If the Commission still decides to impose any monetary penalty upon Mr. Roy,
such penalty should only be calculated and be based on the income attributable to
him from OP-5, and not upon Mr. Roy's total income.
Analysis:
16. The Commission has perused the applications seeking lesser penalty filed by AB InBev,
OP-1, OP-4, Mr. Steven Bosch and Mr. Shalabh Seth under Section 46 of the Act, the
investigation report submitted by the DG and the evidences collected by the DG, the
suggestions/objections to the DG Report, convenience compilations and written
arguments filed by the parties, and also heard the oral arguments made by the respective
learned counsel/senior counsel representing the parties in the matter.
17. The Commission notes that the DG, in the present matter, has established cartelisation
amongst the OPs in 10 States/UTs out of total 36 States/UTs (28 states and 8 UTs) in
India. As such, the Commission shall, in the succeeding paragraphs, do State-wise
analysis of the conduct of the OPs based upon the evidences gathered by the DG, and the
submissions made by the parties.
Andhra Pradesh
18. With respect to the State of Andhra Pradesh in which Corporation Model exists, the DG
has relied upon the following evidences to give a finding of cartelisation against the OPs:
(i) E-mail communications dated 09.06.2009 exchanged between Mr. Kiran Kumar
and Mr. Nirmal Rajani of OP-1 and Mr. S. Diwakaran of OP-3, which were
recovered during search and seizure operation from the premises of OP-1:
Suo Motu Case No. 06 of 2017 54
E-mail 1
E-mail 2
Email 3
Suo Motu Case No. 06 of 2017 55
Email 4
(ii) Statement of Mr. Kiran Kumar of OP-1 regarding the e-mails dated 09.06.2009:
"To the best of my knowledge, in order to ensure speedy completion of the
tender process, as explained in Q. No. 3 above, we had exchanged pricing
proposals with SAB Miller prior to price fixation. Mr. Diwakaran had
forwarded SAB Miller's proposed price list for AP to me and we would
have submitted similar pricing for UBL brands."
(iii) E-mail communication dated 15.11.2013 sent by Mr. Shalabh Seth of OP-3 to Mr.
Kiran Kumar of OP-1, which was recovered during search and seizure operation
from the premises of OP-1:
Suo Motu Case No. 06 of 2017 56
(iv) Statement of Mr. Kiran Kumar of OP-1 regarding the e-mail dated 15.11.2013:
"This e-mail pertains to a discussion between SAB Miller and UBL
agreeing on prospective price quotations made in Andhra Pradesh. It is
likely that UBL would have also applied for similar pricing, though it is
pertinent to note that Andhra Pradesh and Telangana award identical
price increases to all existing brands, irrespective of actual price applied
for, subject to it being higher than the percentage increase awarded by the
Government ...".
(v) Messages exchanged between Mr. Shalabh Seth of OP-3 and Mr. Kiran Kumar of
OP-1 in 2013:
Suo Motu Case No. 06 of 2017 57
19. From the e-mail communications dated 09.06.2009 exchanged between OP-1 and OP-3
extracted at point (i) above, which have been explained by Mr. Kiran Kumar of OP-1 at
point (ii) above, it is evident that in 2009, price proposals to be quoted to the State
Corporation were exchanged between OP-1 and OP-3 with respect to the State of Andhra
Pradesh. Similarly, from the e-mail dated 15.11.2013 extracted at point (iii) above which
has been explained by Mr. Kiran Kumar of OP-1 at point (iv) above, it is evident that in
2013 also, OP-3 sent its price proposals to be quoted to the State Corporation to OP-1.
Even the messages exchanged between Mr. Kiran Kumar of OP-1 and Mr. Shalabh Seth
of OP-3 in 2013 extracted at point (v) above, evidence co-ordination amongst OP-1 and
OP-3 with respect to the pricing proposals to be quoted in the State of Andhra Pradesh.
20. Thus, from such evidences, exchange of commercially sensitive information regarding
MRP and Basic Prices to be quoted to the Andhra Pradesh State Corporation between
OP-1 and OP-3 in the years 2009 and 2013 is apparent. This has not even been denied by
Mr. Kiran Kumar of OP-1, the sender/recipient of the information, in his deposition
recorded before the DG.
21. Before the Commission, neither OP-1 nor OP-3 has denied such exchange of information
amongst themselves. OP-1 has however, explained that the Andhra Pradesh State
Beverages Corporation Limited ('APSBCL') granted price approval through a tender
process, which may not be an annual exercise. As such, the opportunity with the OPs to
apply for a price increase arose only once every four to five years. Hence, given that the
opportunities to seek price approvals were provided by APSBCL only once in three to
five years and seeking price increase is a time-consuming process, OP-1 intended that
there be no untoward delay in the tender process. Therefore, it exchanged notes on the
quotations to be made to APSBCL with OP-3 to expedite the process.
22. OP-1 further submitted that the DG has failed to establish actual price co-ordination
amongst OP-1 and OP-3 at the time of quotation of bids to APSBCL. The actual bids
quoted by OP-1 and OP-3 have not been analysed by the DG. As such, as per OP-1, even
if exchange of pricing information took place between OP-1 and OP-3, there is no
evidence that actual co-ordination of prices between OP-1 and OP-3 took place in the
State of Andhra Pradesh.
Suo Motu Case No. 06 of 2017 58
23. A bare reading of the provisions of Section 3 (1) of the Act shows that these provisions
not only proscribe the agreements which cause AAEC within India, but the same also
forbid agreements which are likely to cause AAEC. In the view of the Commission, even
mere exchange of commercially sensitive pricing information amongst OP-1 and OP-3 in
2009 and 2013, compromised the integrity of independent bidding process, and was
likely to stifle competition amongst them in the tenders floated by APSBCL. As such,
since such conduct of OP-1 and OP-3 was likely to cause AAEC in India, the same
amounts to contravention of the provisions of Section 3(3)(a) and 3(3)(d) read with
Section 3(1) of the Act.
Daman and Diu
24. In respect of the UT of Daman and Diu having Free Market Model, the DG has relied
upon the following evidences to give a finding of cartelisation amongst the OPs:
(i) E-mail communications dated 01.10.2008 exchanged between and Mr. Percy
Driver and Mr. Kiran Kumar of OP-1 and Mr. Jaypal Thapa and Mr. Nilojit Guha
of OP-3, which were recovered during search and seizure operation from the
premises of OP-1:
E-mail 1
Suo Motu Case No. 06 of 2017 59
E-mail 2
E-mail 3
Suo Motu Case No. 06 of 2017 60
(ii) Statement of Mr. Kiran Kumar of OP-1 regarding the e-mails dated 01.10.2008:
"As far as I can remember, Mr. Jaypal Thapa was the Sales Executive of
SAB Miller in the territory of Daman and Diu. The matter being very old, I
can make out from the mail that on account of the increase in Excise duty,
the local employees of both companies would have agreed to take a small
price increase along with the duty increase. It is likely that I might have
approved the said price increase."
25. From the aforesaid e-mail communications extracted at point (i) above, the Commission
notes that on 01.10.2008, Mr. Jaypal Thapa of OP-3, upon taking approval from Mr.
Nilojit Guha of OP-3, sent OP-3's calculation of wholesale prices of OP-3's and OP-1's
Beer in Daman market to Mr. Percy Driver of OP-1, who forwarded the said e-mail to
Mr. Kiran Kumar of OP-1 for information. Before the DG, Mr. Kiran Kumar, in his
statement extracted at point (ii) above, did not deny having received the cost card
prepared by OP-3; rather he admitted that he might have approved the price increase
agreed upon by the local employees of OP-1 and OP-3.
26. As such, on the basis of such evidence, price co-ordination between OP-1 and OP-3 in
2008 is clearly established. However, there is no evidence in the DG Report which may
show that such co-ordination amongst OP-1 and OP-3 continued even beyond
20.05.2009 or that supply of Beer took place in the UT of Daman post 20.05.2009 (when
the provisions of Section 3 of the Act came into force), pursuant to the aforesaid o-
ordination between OP-1 and OP-3 in 2008.
27. As such, in the view of the Commission, no case of contravention of the provisions of
Section 3 of the Act in the UT of Daman and Diu amongst the OPs, is made out.
Delhi
28. The DG has noted that in the Hybrid Market of Delhi, Beer is sold through Corporation
as well as privately. The State Government has formed its own corporation to procure
and distribute liquor products in the territory, besides also giving open licenses to
wholesalers and retailers to sell the product within the State. The mode of procurement
through Corporation is that a tender is generally floated for the State of Delhi and each
company is called for price negotiations. Prices are fixed by the Delhi Government for
Suo Motu Case No. 06 of 2017 61
supply to Corporations, based on lowest price in the neighbouring states. 60% of the
distribution and retail outlets are controlled by 4 Corporations created by the State
Government, and remaining 40% of the distribution and retail outlets are held by private
entities.
29. In regard to NCT of Delhi, the DG has relied upon the following evidences to give a
finding of cartelisation amongst the OPs:
(i) Internal e-mail communications dated 11.05.2012 exchanged between Mr. Anil
Bahl, Mr. Soren Lauridsen, Mr. Michael Jensen, Mr. Subodh Marwah, Mr. Manas
K. Nijhawan, Mr. Dheeraj Mishra, Mr. Gaurav Vir and Mr. Nimish Gupta of OP-4,
which were submitted by OP-4 before the DG:
E-mail 1
Suo Motu Case No. 06 of 2017 62
E-mail 2
E-mail 3
(ii) Statement of Mr. Michael Jensen of OP-4 regarding e-mails dated 11.05.2012
asking him to comment on the fact that OP-4 was actively co-ordinating with its
competitors on pricing issues, and taking utmost care so as not to leave any
documentary evidence of the same:
"Yes, I completely agree."
(iii) E-mails exchanged in July and August 2013 between officials of the OPs including
Mr. Shekhar Ramamurthy and Mr. Perry Goes of OP-1, Mr. Chris White, Mr.
Mayank Bhatia and Mr. Ajit Jha of OP-3, Mr. Dhiraj Kapur and Mr. Soren
Lauridsen of OP-4, and Mr. Sovan Roy of OP-5, which were recovered during
search and seizure operation from the premises of OP-5:
Suo Motu Case No. 06 of 2017 63
E-mail 1
E-mail 2
E-mail 3
Suo Motu Case No. 06 of 2017 64
E-mail 4
E-mail 5
Suo Motu Case No. 06 of 2017 65
E-mail 6
E-mail 7
Suo Motu Case No. 06 of 2017 66
E-mail 8
E-mail 9
E-mail 10
(iv) Internal e-mails exchanged in August 2013 between Mr. Shalabh Seth, Mr. Ajit
Jha, Mr. Rakshat Chopra, Mr. Nilojit Guha and Mr. Anil Arya of OP-3 which were
submitted by OP-3:
Suo Motu Case No. 06 of 2017 67
E-mail 1
E-mail 2
Suo Motu Case No. 06 of 2017 68
(v) Statement of Mr. Shekhar Ramamurthy of OP-1 regarding the e-mails exchanged
in July and August 2013:
"... the context is that the Delhi Government had allowed in their policy a
basic price increase of 3% to Beer manufacturers, irrespective of what
their basic price at that time was. However, even this price increase that
had been approved by the Delhi Government was denied to manufacturers
on account of the fact that the State would have lost some of its revenue
due to an element called "rounding-off" which the Government enjoyed.
In this background, the Beer manufacturers felt the need to petition the
Government for a fair price increase to cover their costs. The 5% figure
was taken since at the same time the Delhi Government had allowed hard
liquor manufacturers to take a 5% increase. The '+12' component
referred to the additional reimbursement towards other incidental
expenses which had also gone up.
(vi) Statement of Mr. Sovan Roy of OP-5 regarding the e-mails exchanged in July and
August 2013:
"......the prices in Delhi are fixed by the Delhi Govt. to supply to the
Corporations, based on lowest price in the neighbouring states. For quite
some time there was no major increase inspite of increase in the cost of the
inputs. It was decided by the Board that representation be made to the
powers including the CM, to plead the case for the Beer industry. In this
connection, based on the mail shown, member companies forwarded
emails showing cost computations as per the discussion note.
Subsequently, AIBA only followed up the issue of discrimination by the
department of granting 5% increase to the spirits industry and only 3% to
the Beer industry. This representation to the CM was subsequently replied
by the department that the 3% increase only is valid ... The platform of
AIBA was used for pursuing increase of rates of the Beer industry"
(vii) Statement of Mr. Nilojit Guha of OP-3 regarding e-mails exchanged by him:
"I do not deny having discussions with mainly Mr. Kiran Kumar on a few
occasions on the pricing issues. I recollect having contacted Mr. Kiran
Kumar at times on pricing issues. For example, states like Delhi, Orissa,
Maharashtra, Karnataka, West Bengal mainly. In these pricing
discussions, I played the role of a co-ordinator as per instruction of my
superior (Mr. Shalabh Seth) ..."
Suo Motu Case No. 06 of 2017 69
(viii) Statement of Mr. Michael Jensen of OP-4 regarding the e-mails exchanged in July
and August 2013:
"... However, free States like WB, Maharashtra, Karnataka (also Delhi
which is having hybrid model), pricing could be recommended to a higher
degree from the brewers, than in other States. Therefore, to the best of my
knowledge, those particular States motivated a higher degree of pricing
discussions among brewers ..."
(ix) Submission dated 24.12.2018 of OP-4 before the DG wherein OP-4 acknowledged
that prior to 2016 (when it appointed Mohan Gold-Water Breweries Ltd as its
licensee in Delhi), there were discussions between itself and OP-1 and OP-3 on co-
ordinated price increase in Delhi. OP-4 stated that it had been primarily interacting
with OP-1 and occasionally with OP-3 to discuss pricing of Beer in Maharashtra,
West Bengal, Delhi, Karnataka, Puducherry, Odisha and Bihar. The pricing
discussions took place with a view to seek increase in Beer prices and to co-
ordinate the proposed actions in response to extraordinary Excise duty increases or
Bottle Bar Codes by various State Authorities. The discussions on prices were
primarily focused on the mainstream brand (i.e., Tuborg) in the Free Market States
such as Maharashtra, West Bengal and Puducherry, the Hybrid State of Delhi as
well as certain Corporation States such as Odisha, Karnataka and Bihar.
30. From the internal e-mails trail dated 11.05.2012 extracted at point (i) above, the
Commission notes that given the sensitivity of the e-mail sent by Mr. Anil Bahl of OP-4
to his superiors and colleagues intimating them about the planned price increase in Delhi
by competing companies and giving an update of the status of talks held with the Excise
Commissioner, Delhi and the strategy ahead, OP-4's Legal and Corporate Affairs
Director Mr. Gaurav Vir asked everyone to discuss such sensitive issues over conference
calls or in person only. Subsequently, knowing the anti-competitive contents of such e-
mail communication and likely infringements of competition law, company's then
Managing Director, Mr. Soren Lauridsen, also directed his subordinates to desist from
sending such emails. Such co-ordination has even been accepted by Mr. Michael Jensen
of OP-4 in this statement, as extracted above at point (ii).
Suo Motu Case No. 06 of 2017 70
31. Further, from the e-mails exchanged in July and August 2013 between officials of OP-1,
OP-3, OP-4 and Director General of OP-5 extracted at point (iii) above, the Commission
observes that while approaching the Government of Delhi for price revision of Beer in
2013, Mr. Shekhar Ramamurthy of OP-1 suggested to OP-3 and OP-4 to ask for a 5%
increase with or without ₹10 towards additional costs for barcoding for its key brands.
After deliberating with the Government and its members, Mr. Sovan Roy of OP-5 and
Mr. Perry Goes of OP-1 also suggested preparation of cost cards presenting different
scenarios for key brands by the OPs. The detailed cost cards prepared by Mr. Perry Goes
of OP-1 were forwarded by Mr. Sovan Roy of OP-5 to the officials of OP-4 for
discussion with their team members. In his e-mail sent on 07.08.2013, Mr. Shekhar
Ramamurthy of OP-1 had suggested an option to ask for increase of 5% + ₹12 towards
barcoding or 7.5%. Subsequently, Mr. Soren Lauridsen of OP-4, in his internal e-mail to
Mr. Dhiraj Kapur of OP-4 with Cc to Mr. Michael Jensen of OP-4, had suggested to go
for the maximum, i.e., 7.5% increase.
32. The internal e-mails exchanged in August 2013 between officials of OP-3 extracted at
point (iv) above also show that there was some sort of understanding amongst the OPs
that OP-1's price would be the highest so that the other OPs also gain even in case the
Government resorts to rounding off the MRP to nearest multiple of ₹5.
33. In its objections/suggestions to the DG Report, OP-1 has argued that such discussions
were a result of legitimate increase required by the OPs to cover their costs and not incur
losses as their transportation and incidental costs had gone up which were not covered by
the increase granted by the Delhi Government and there was also a policy of rounding-
off in Delhi. Further, OP-1 has stated that the OPs were forced to make such joint
representation for a 5% increase through OP-5 as the same had been discriminately
awarded to the spirits industry. All the more, the increase in MRP was historically due to
the increase in Excise duty or increase in retail margin or revision of the methodology for
calculation of EBP and MRP etc. and the price increase sought jointly by the OPs was
never implemented; thus, causing no AAEC in the market.
Suo Motu Case No. 06 of 2017 71
34. OP-4 has also argued in its objections/suggestions to the DG Report that there was no
implementation of the pricing discussions in Delhi, and therefore, there was no
contravention of the provisions of the Act caused by the OPs. OP-4 has explained that in
2013, the Delhi Government had unilaterally implemented a specific individual Bottle
Bar Code for the Beer industry, which was a costly proposition for the Beer companies
(as compared to Indian-Made Foreign Liquor ('IMFL')). The Beer companies had
agreed to implement this, but had communicated to the Excise Department that they
would look for costs to be compensated. However, in June 2013, the Delhi Government,
while increasing the price of IMFL by 5%, increased the price of Beer by only 3%.
Further, by way of notification dated 18.07.2013, the Delhi Excise Department asked the
Beer companies to absorb an additional amount of 18 paisa per label. Bearing in mind
these costs, the total impact of Bar Code affixation was an average of ₹12 per case of
Beer. At this point and in light of the circumstances affecting the industry at large (i.e.,
the unilateral imposition of Bar Code cost by Delhi Government coupled with only a 3%
price increase for Beer, as against 5% increase given to IMFL), the Beer companies
communicated with each other through OP-5, on preferences of the Beer companies for
maximum price increase, i.e., whether they should ask for 10% price increase over last
year prices or 7.5% increase over last year prices. They also discussed the reimbursement
to be sought for Bar-Coding charges. The e-mails exchanged on 07.08.2013 indicate that
the Beer companies, through OP-5, had agreed to a 7.5% increase in price. Following
this, the Beer companies, through OP-5, made a representation to the Chief Minister of
Delhi on 08.08.2013. However, the Delhi Government did not agree to the increase of
7.5% and this was consequently, not implemented. Further, the Bar-Coding cost was not
reimbursed to the Beer companies and therefore, had to be ultimately borne entirely by
the Beer companies themselves. As such, there was no impact of the alignment between
the Beer companies on this occasion.
35. In the view of the Commission, from the above trail of e-mails (extracted at points (iii)
and (iv) above) and the statements made by senders/recipients of such e-mails extracted
at points (v), (vi), (vii) and (viii) above, it is evident that OP-1, OP-3 and OP-4 had co-
ordinated their price revision requests in the NCT of Delhi in 2013, through the platform
of OP-5, taking advantage of the free pricing policy in Delhi. This has not even been
refuted by the OPs in their response to the DG Report. Further, from the e-mails
Suo Motu Case No. 06 of 2017 72
extracted at point (i) above, it is evident that the officials of OP-4 were aware of the anti-
competitive nature of their discussions with the competitors and as such, they decided
not to discuss such sensitive issues over e-mails.
36. Though OP-1 and OP-4 have submitted that they had been forced to indulge into such
co-ordination to mitigate their losses, in the view of the Commission, while the OPs were
well within their rights to take up their grievances and issues with the concerned
authorities, from competition law perspective, it does not justify the OPs exchanging
commercially sensitive information and acting in furtherance thereof. Further, though
OP-4 has submitted that implementation of the price alignment amongst the OPs did not
take place, the Commission notes that the same was only because price revision request
was not accepted by the State Government. In any event, the plea is thoroughly
misconceived. Once an anti-competitive agreement is reached, the integrity of the
competitive process stands compromised. Be that as it may, in the facts of the present
case, it is evident that since price revision quotations were submitted to the government
in furtherance of the discussions amongst the OPs, implementation of the agreement also
stood completed.
37. OP-5 has submitted in its objections/suggestions to the DG Report that its role in Delhi
was merely to seek re-imbursement of costs involved in 2D scanning Bar Codes on Beer
bottles that was imposed by the Government in its Excise Policy. Further, it has
submitted when the State Government agreed to grant some re-imbursement in the form
of rate increase, OP-5 agitated against discriminatory grant of 3% to Beer industry and
5% to spirits category. Thus, it argued that there was no attempt to get any rate increase,
which continued to be based on the lowest price anywhere in the country as had been
approved by the State Government. As such, there was no anti-competitive discussion on
its platform.
38. With respect to such submission made by OP-5, the Commission observes that OP-5,
being an association of Beer companies, should have limited its role to raising common
issues affecting the industry and its members before the State government. However, it
went beyond and indulged in collection and dissemination of commercially sensitive data
like cost cards of its members. The e-mails extracted at point (iii) above show that the
Suo Motu Case No. 06 of 2017 73
data collected by OP-5 from one member, was shared with other members, for comment.
As such, it is clear that the platform of OP-5 was used by the members for exchange of
commercially sensitive data, and OP-5 has no explanation for the same. The impugned
conduct of the OPs including of OP-5, if examined in the backdrop of permissible
boundaries of legitimate conduct of trade associations, appear to ex facie transgress the
perimeter within which trade associations can legitimately espouse the cause of their
respective members.
39. It may be noted that Section 3(1) of the Act not only proscribes agreements which cause
AAEC within India, but also forbids agreements which are likely to cause AAEC. Hence,
in the view of the Commission, once the OPs are found to have agreed to co-ordinate
their price revision requests, it cannot be ruled out that such 'agreement' was likely to
stifle competition amongst them and was likely to cause AAEC in India. Hence, the
conduct of OP-1, OP-3, OP-4 and OP-5 in the NCT of Delhi in 2013, amounts to
contravention of the provisions of Section 3(3)(a) read with Section 3(1) of the Act.
Karnataka
40. In respect of the State of Karnataka having Corporation Market Model, the DG has relied
upon the following evidences to give a finding of price co-ordination amongst the OPs:
(i) E-mail dated 25.01.2011 sent by Mr. S. Diwakaran of OP-3 to Mr. Kiran Kumar
of OP-1, which was recovered during search and seizure operation from the
premises of OP-1:
Suo Motu Case No. 06 of 2017 74
(ii) Statement of Mr. Kiran Kumar of OP-1 on the e-mail dated 25.01.2011 received
by him:
"... In some markets like Karnataka, price changes are allowed on only
three specified dates in the year. I am submitting a copy of the relevant
Suo Motu Case No. 06 of 2017 75
provision of Karnataka Excise Rules in this regard. In order to ensure that
we do not suffer huge losses as a result of this policy, competitors would
exchange notes and price main products similarly.
... For the reasons explained ... above, UBL and SAB Miller might have
exchanged prospective pricing plans. It is most likely that these would
have been implemented in the market."
(iii) MRP of SKUs of OP-1 and OP-3 in 2011 in the State of Karnataka, submitted by
OP-1 and OP-3 before the DG and tabulated by the DG:
Suo Motu Case No. 06 of 2017 76
(iv) E-mail dated 22.12.2011 sent by Mr. Kiran Kumar of OP-1 to Mr. Shalabh Seth
and Mr. Anil Arya of OP-3, which was submitted by OP-1 before the DG:
Suo Motu Case No. 06 of 2017 77
(v) Price changes effected by OP-1 in 2011 for the State of Karnataka in its SKUs,
and prices of comparable brands of OP-3, submitted by OP-1 and OP-3 before the
DG and tabulated by the DG:
(vi) E-mail communications exchanged in January 2015 between Mr. Nitin Sharma of
OP-3 and Mr. Anil Bahl, Ms. Sukanta Banerjee and Mr. Jagannath Prasad of OP-
4, which were submitted by OP-4 before the DG:
E-mail 1
Suo Motu Case No. 06 of 2017 78
E-mail 2
(vii) Submission dated 24.12.2018 of OP-4 before the DG wherein OP-4 stated that
"for UB, Karnataka is the most profitable market in terms of absolute
profitability. Therefore, it is in UB's interest to ask for price increase. Few weeks
Suo Motu Case No. 06 of 2017 79
before the annual price increase (June or July), CIPL and UB would talk to
confirm their understanding on seeking an INR 5 per bottle (excluding taxes)
increase. Any implementation of local issues such as excess stock etc. would be
communicated in advance between the companies so as to not cause any mis-
understanding among themselves."
(viii) Comparison of MRPs of highest selling SKU, i.e., Strong Beer 650ml bottle -
KFS of OP-1, Haywards 5000 ('H5K') of OP-3/AB InBev and Tuborg Strong
('TBS') of OP-4, in the State of Karnataka over the period 2009-2018, as culled
out from their replies submitted to the DG, tabulated and graphically
demonstrated by the DG:
Suo Motu Case No. 06 of 2017 80
41. From the e-mail dated 25.01.2011 extracted at point (i) above, it is noted that OP-3 sent
to OP-1, its proposed MRPs for various brands, to be applied to the Excise authorities in
the State of Karnataka. Mr. Kiran Kumar of OP-1, the recipient of the said e-mail, in his
statement extracted at point (ii) above, explained the reason behind such exchange of
proposed prices stating that as price increase was allowed only thrice a year, prospective
pricing plans might have been exchanged between OP-1 and OP-3.
42. When the actual price movement of MRPs of SKUs of OP-1 and OP-3's products in
2011 as extracted at point (iii) above are compared with the proposals sent via e-mail
dated 25.01.2011, it is noted that the prices of H5K, Knock Out and KFS in the 650ml
Strong Bottle category were revised by OP-1 in accordance with the proposals sent by
OP-3 to OP-1. OP-3 had intimated the proposed MRP on 25.01.2011 of ₹78/- for H5K
and Knock Out 650ml bottle; and OP-1 had increased its price of KFS to ₹78/- on
04.02.2011, with OP-3 following suit on 16.02.2011 raising the MRP of its above two
brands to ₹78/-. Further, as proposed, OP-3 also increased the prices of its Foster's Mild
Suo Motu Case No. 06 of 2017 81
650ml bottle, 330ml bottle and 330ml can, and H5K and Knock Out 500ml can and
330ml can, to the figures intimated to OP-1.
43. It is noted that though OP-3 had also sent proposed MRPs of Royal Challenge 650ml
Bottle, H5K 330ml bottle, Knock Out 330ml bottle and Royal Challenge 330ml bottle,
price revisions made for these brands and for corresponding Beer brands of OP-1 were
not in accordance with proposals sent. However, in this regard, it is noted that
nonetheless, the revisions made were to identical figures, which were a little
higher/lower than the proposed ones. It is axiomatic that cartelists would seek to break
the pattern of symmetry of revisions through minor variations here and there and as such,
nothing significant turns upon such deviations from the exchanged or agreed prices.
Also, it cannot be ruled out that OP-1 and OP-3 may have had subsequent
communications after 25.01.2011 before deciding the new MRPs of these brands.
44. Thus, the said e-mail communication and corresponding revisions in MRPs of OP-1 and
OP-3, clearly shows that in January 2011, OP-1 and OP-3 co-ordinated their price
revisions so as to avoid any price war between themselves.
45. Similarly, from the e-mail dated 22.12.2011 extracted at point (iv) above, it is noted that
OP-1 sent to OP-3, its price increase working for various brands.
46. When the actual price movement of MRPs of SKUs of OP-1 and OP-3's products as
extracted at point (v) above are compared with the price increase intimated via e-mail
dated 22.12.2011, it is noted that the prices of OP-1's KFS Premium 650ml and 330ml,
Kingfisher Premium Lager 650ml, and UB Export Lager 650ml and 330ml, were revised
by OP-1 in accordance with the prices communicated by it to OP-3. It can be observed
from the rates intimated by OP-1 to OP-3, and the actual price revisions made by OP-1 in
the 5 SKUs, that OP-1 preponed its first price revision to 29.12.2011 to the rates as
intimated in the said e-mail. Further, as indicated in the e-mail, OP-1 again went ahead
with another price revision on 02.04.2012 with the MRPs of KFS Premium Beer 650ml
and Kingfisher Premium Lager Beer 650ml identical to the rates communicated in the e-
mail. OP-3 also increased the MRPs of its H5K 650ml SKU (competing brand to KFS
Premium Beer 650ml) to ₹80/- and further to ₹85/- on 23.01.2012 and 01.04.2012,
respectively. Similarly, for its H5K 330ml SKU (competing brand to KFS Premium
Suo Motu Case No. 06 of 2017 82
330ml), OP-3 increased the prices to ₹45/- and ₹47/- on 23.01.2012 and 01.04.2012. The
fact that both these MRP revisions were identical to the rates conveyed by OP-1 and
corresponding to the schedule of price revisions by OP-1, makes it evident that
December 2011 onwards, both OP-3 and OP-1 acted upon the price revision proposals
exchanged amongst them.
47. Further, the e-mail communications of January 2015 extracted at point (vi) above also
indicate that subsequent to talks between Mr. Anil Bahl of OP-4 and Mr. Nilojit Guha of
OP-3, Mr. Nitin Sharma of OP-3 forwarded OP-3's proposed prices in the State of
Karnataka to Mr. Anil Bahl of OP-4. Upon receipt of the same, Mr. Anil Bahl asked his
subordinates at OP-4 to plan OP-4's price increase in line with the file received from OP-
3. These e-mails show that OP-3 and OP-4 also exchanged and aligned their prices in the
State of Karnataka in 2015.
48. In fact, when one analyses the revision in prices of highest selling SKU, i.e., strong Beer
650ml bottle - KFS of OP-1, H5K of OP-3/AB InBev and TBS of OP-4, in the State of
Karnataka over the period 2009-2018, as tabulated and graphically demonstrated at point
(viii) above, it is noted that the dates of price revisions by all OP-1, OP-3 and OP-4, were
very close to each other with a few instances in which all three OPs increased their prices
within 1-2 days of each other. The first instance of identical price revisions by OP-1 and
OP-3 had been in February, 2011 when OP-1 fixed MRP of its KFS 650ml to ₹78 on
04.02.2011 with OP-3 also raising MRPs of its H5K 650ml to ₹78 on 16.02.2011. This
identical pricing by OP-1 and OP-3 was pursuant to communication of proposed price
hike by OP-3 on 25.01.2011 to OP-1. Further, after OP-1 raised MRP of its KFS on
29.12.2011 from ₹78 to ₹80, OP-3 also revised its prices on 23.01.2012 to the same
level. Subsequently, on 01.04.2012, OP-3 raised its price to ₹85, with OP-1 increasing its
price to identical figure on the very next day, i.e., 02.04.2012, and OP-4 following suit
on 08.04.2012. This price hike by all the OPs was also pursuant to communication of
OP-1's prices to OP-3 on 22.12.2011. Thereafter, all the three OPs staggered their price
raise to ₹90 over the period of November 2012 to March 2013, with OP-4 raising it
further to ₹95 in April 2013. Then, after a gap of around a year, OP-1 further raised its
prices on 28.02.2014 to ₹100, and OP-3 and OP-4 also revised their prices to identical
figure on 04.03.2014 and 07.03.2014, respectively. After keeping the prices stable for
Suo Motu Case No. 06 of 2017 83
over nine months, OP-1 again took the lead in revising its price to ₹105 on 24.01.2015,
and thereafter both OP-3 and OP-4 also increased their prices to ₹105 on 12.02.2015. In
the next year, OP-1 again took the lead in raising its price to ₹120 on 31.03.2016, with
OP-3 following suit on 01.04.2016 and OP-4 on 02.04.2016. The prices were further
raised to ₹125 in 2017, with OP-4 increasing its price on 19.04.2017 and OP-1 also
raising its price to the identical figure in the same year, though the specific date of the
said revision has not been furnished. Subsequently, on 20.04.2018, the price of OP-1's
KFS was raised further to ₹130 and on 22.06.2018, OP-4 also increased its price of TBS
to ₹130, indicating coordination.
49. Though OP-1 has argued that an increase in MRP is not solely the function of the price
revisions sought by the OPs but is mainly influenced by an increase in taxes/levies/excise
duties imposed by the State Corporation and the DG ought to have approached the
Karnataka State Beverages Corporation Limited to understand the reasons behind
approving similar price increases, in the view of the Commission, there is evidence on
record showing that identical MRP increase by OP-1 and OP-3, particularly in 2011, was
a result of their co-ordination in seeking similar price increase from the State
Corporation. Further, OP-4 has also admitted to have co-ordinated with OP-1 and OP-3
in 2015 and 2017 regarding its MRP increases. As such, such submission made by OP-1
seems to have no merit.
50. OP-4 has argued that it did not form part of co-ordination in the State of Karnataka
before 2015 and the DG has wrongly concluded its price parallelism since 2012 onwards.
However, in the view of the Commission, the price parallelism graph at point (viii) above
clearly shows that the MRP of OP-4 also moved in tandem with MRPs of OP-1 and OP-3
since 2012 onwards. OP-4 raising the MRP of its TBS to ₹85 on 08.04.2012, within a
week of OP-3 increasing the MRP of its KFS to ₹85 on 01.04.2012 and OP-1 increasing
the MRP of its H5K to ₹85 on 02.04.2012, cannot be a mere co-incidence.
51. Thus, in light of regular communications amongst the OPs as extracted above, just prior
to price revisions, such pricing behaviour on part of the OPs cannot be termed as
'following the leader' reaction. Moreover, as the prices were decided/approved by the
State regulator, it is not possible for a competitor to raise its prices in similar lines within
Suo Motu Case No. 06 of 2017 84
two days of revision by another, unless it had sought similar price increase from the State
Authority in advance which was approved. Therefore, from the afore-extracted e-mail
communications and the price revision evidence exhibiting strong price parallelism in the
Beer market in the State of Karnataka, cartelisation amongst OP-1, OP-3 and OP-4 in the
State of Karnataka in contravention of the provisions of Section 3(3)(a) read with Section
3(1) of the Act is clearly evidenced from 2011 to 2018 with OP-4 joining in from 2012
onwards.
52. Though the parties have argued that they were forced to indulge into such co-ordination
because of the policies of the Karnataka State Corporation, it is noted that the policy of
the government explained is simply that the beer manufacturers could ask for price rise
from the government only three times a year. The Commission is of the view that such
policy cannot be taken as an excuse for entering into price co-ordination by the parties.
53. Besides the above, the DG has also relied upon the following evidences to give a finding
of co-ordination amongst OP-1 and OP-3 with respect to supply of Beer to premium
institutions in the city of Bengaluru:
(i) E-mail communications dated 30.10.2010 exchanged between Mr. Nirmal
Rajani of OP-1 and Mr. S. Diwakaran of OP-3, which were recovered during
search and seizure operation from the premises of OP-1:
E-mail 1
Suo Motu Case No. 06 of 2017 85
Suo Motu Case No. 06 of 2017 86
E-mail 2
54. Premium institutions (bulk buyers) being a significant platform for Beer manufacturers
to promote their products, the Beer companies offer marketing support in the form of
financial incentives to premium institutions for special offers/events around their brands.
From the above extracted e-mails, it is observed that Mr. Kiran Kumar, Mr. Nirmal
Rajani, Mr. Vivek Agnihotri and Ms. Chandrika Kalia of OP-1 had a meeting with Mr. S.
Diwakaran of OP-3 in March 2010 wherein they decided to optimise their spend and
have equal opportunities to promote their brands in Bengaluru's 'Premium Institutions',
while ensuring minimal market share of OP-4's Tuborg and Budweiser (earlier a product
sold by OP-2). The two OPs decided not to offer any discount on their products sold to
premium institutions. Though in the said meeting they not could agree upon their
individual market share, they agreed to meet again and resolve the issue, particularly on
the sharing of cost and benefits.
55. In fact, in his statement on oath recorded before the DG, Mr. Shalabh Seth of OP-3
admitted that "...Other than pricing, there were discussions on patent bottle pricing,
discounts in a few States, and Institutional Sales (where I was not privy to discussions).
...".
56. As such, on analyses of the aforesaid evidences, the Commission finds that OP-1 and
OP-3 had in 2010 'agreed' to co-ordinate in respect of supplies to premium
Suo Motu Case No. 06 of 2017 87
institutions/bulk buyers in the city of Bengaluru in the State of Karnataka and share costs
and benefits, to keep competition out. Though OP-1 has argued that such discussions
were never implemented by OP-1, and as such, no AAEC in India has been caused, the
Commission is of the considered view that any 'agreement' which is even likely to cause
AAEC in India, also amounts to contravention of the provisions of Section 3(3) of the
Act. A bare reading of the provisions of Section 3 (1) of the Act shows that these
provisions not only proscribe the agreements which cause AAEC within India, but the
same also forbid agreements which are likely to cause AAEC. Thus, in the view of the
Commission, OP-1 and OP-3 agreeing to co-ordinate in respect of supplies to premium
institutions/ bulk buyers in the city of Bengaluru in the State of Karnataka was likely to
stifle competition amongst them and was likely to cause AAEC in the market.
Implementation of such anti-competitive agreement is not a sine qua non for establishing
contravention. Thus, such 'agreement' between OP-1 and OP-3 is found by the
Commission to be in contravention of the provisions of Section 3(3)(c) read with Section
3(1) of the Act.
Maharashtra
57. In regard to the State of Maharashtra having Free Market model, the DG has relied upon
the following evidences to give a finding of price co-ordination amongst the OPs:
(i) E-mails exchanged in September 2011 between Mr. Kiran Kumar of OP-1 and Mr.
Anil Arya of OP-3, which were recovered during search and seizure operation from
the premises of OP-1:
E-mail 1
Suo Motu Case No. 06 of 2017 88
E-mail 2
(ii) Statements of Mr. Kiran Kumar of OP-1 regarding the aforesaid e-mails exchanged
by him, on two separate occasions:
"... the above emails were communicated between Anil Arya of SABMiller
and myself .... I had sent an excel sheet containing basic price, bottle
deposit, distributor's margin and our indicative cost of production ... The
purpose of the communication was to give joint representation to
Maharashtra Government regarding a returnable bottle deposit system
like prevalent in the soft drink industry."
"This was a project undertaken between SAB Miller and UBL to attempt to
convince the Maharashtra Government to introduce a deposit based
returnable bottle system so that the consumers would benefit fully from the
full cost of the returnable bottle. Representations to the Excise department
as well as the VAT department were rejected by the then Commissioners,
and the project was dropped."
Suo Motu Case No. 06 of 2017 89
(iii) Comparison of MRPs of highest selling SKU, i.e., strong Beer 650ml bottle - KFS
of OP-1, H5K of OP-3/AB InBev and TBS of OP-4, in the State of Maharashtra
over the period 2009-2018, as culled out from the replies of the parties submitted
before the DG, tabulated and graphically demonstrated by the DG:
Suo Motu Case No. 06 of 2017 90
58. The Commission notes from the e-mails extracted at point (i) above that OP-1 and OP-3
had exchanged their price cards to be submitted to the Maharashtra Government for
getting a co-ordinated price increase in the years 2011. Mr. Kiran Kumar of OP-1 and
Mr. Anil Arya of OP-3 had exchanged their respective companies' break-up of cost of
production for different MRP levels. The attachment to the e-mail sent by Mr. Kiran
Kumar also indicates that OP-1 and OP-3 co-ordinated for the difference between the
increased contribution at different price levels. Though Mr. Kiran Kumar, in his
statement extracted at point (ii) above, admitted to having shared an excel sheet
containing basic price, bottle deposit, distributor's margin and indicative cost of
production, he tried to link the said exchange of information to the issue of deposit-based
returnable bottles. In the view of the Commission, this does not seem to be a plausible
explanation for exchange of basic prices, distributor's margin and indicative cost of
production. Further, even though it has been asserted by Mr. Kiran Kumar that the said
proposal/project was dropped, the Commission is of the view that the very fact of
exchange of commercially sensitive information between two competitors is anti-
Suo Motu Case No. 06 of 2017 91
competitive in nature as the same is likely to stifle competition amongst players and
likely to cause AAEC in the market.
59. Further, when one analyses the revision in prices of highest selling SKU, i.e., strong Beer
650ml bottle - KFS of OP-1, H5K of OP-3/AB InBev and TBS of OP-4 in the State of
Maharashtra over the period 2009-18, as tabulated above and graphically demonstrated
at point (iii), it can be seen that before the year 2011, the price revisions were made by
OP-1 and OP-3 on different dates. However, since 2011, the dates of price revisions by
OP-1 and OP-3 show uncanny closeness. Further, from April 2014 onwards, OP-4 also
joined OP-1 and OP-3 in making price revisions around the same time. On 02.04.2011,
OP-1 raised the price of its KFS from ₹80/- to ₹95/-; OP-3 followed it with identical
price revision of its H5K brand on 13.04.2011. Then in the next year, both OP-1 and OP-
3 increased the prices of their respective brands to ₹98/- on the same date on 01.04.2012.
Indifferent to the two, OP-4's price of its TBS brand was ₹100/- in 2012. Subsequently,
on 26.02.2013, the MRP of KFS was increased to ₹100/- while it was raised to the
identical level for H5K on 07.03.2013. Thereafter, after a gap of only a month, OP-1
hiked the MRP of KFS to ₹110/- on 01.04.2013, with OP-4 following it the very next
day. However, OP-4 raised the price of its TBS brand to ₹113/- on 04.04.2013 which it
brought down to ₹110/- on 01.06.2013. OP-1 took the lead to increase its price further to
₹115/- on 29.04.2014, and OP-4 and OP-3 followed it with similar pricing on 10.05.2014
and 14.05.2014 respectively. The next year again, OP-1 was the first to further increase
its price to ₹120/- on 30.01.2015, and it was followed by OP-3 and OP-4 on 12.02.2015
and 19.02.2015 respectively. However, within 8 months, OP-3 took the initiative to go
up to ₹125/- on 01.10.2015, and OP-4 and OP-1 then adopted the same pricing on
03.10.2015 and 06.10.2015 respectively. Similar pattern has been also seen in the years
2016 and 2017 also, with OP-1 and OP-4 revising their prices to ₹160/- on the same date,
i.e., 05.04.2018. However, the MRP data for H5K 2017 onwards for the State of
Maharashtra is not available.
60. Thus, as can be seen from the line graph at point (iii) above, 2014 onwards, the price-line
of KFS, H5K and TBS in the State of Maharashtra moved parallelly. It is therefore,
apparent that OP-1, OP-3 and OP-4 took advantage of the State Excise Policy to allow
free pricing of Beer in the State of Maharashtra with the only requirement of obtaining
Suo Motu Case No. 06 of 2017 92
Government approval of the manufacturer-determined prices, to fix identical prices of
their top-selling SKUs.
61. In fact, OP-4 submitted before the DG that:
"... CIPL only got involved in pricing discussions after it became a reasonable
meaningful player in Maharashtra, which was around 2012. CIPL was keen to
know the position that its competitors (particularly UB; UB mainly coordinated
with SAB) would be likely to adopt on price increases. Whilst CIPL wanted to
take an aggressive pricing position in Maharashtra, it did not wish to risk taking
a unilateral stand on price increase, which could have had negative impact on
volumes and revenues and its competitors would have gained at CIPL's expense.
Therefore, in the usual course, the respective national sales head of CIPL (Mr.
Anil Bahl) and UB (Mr. Kiran Kumar Kumar) discussed the proposed price
increases before the beginning of 'season' (i.e., the summer months, when Beer
consumption is higher), typically in January or February. The common
understanding was that a price increase of INR 5 per bottle (excluding taxes)
almost every year would be sought ... The meetings and discussions were to seek
a confirmation on such price increase from the competitors, primarily, UB...
there were discussions among Mr. Anil Bahl, Mr. Kiran Kumar, Mr. Shalabh
Seth and later with Mr. Nilojit Guha (who replaced Mr. Shalabh Seth at SAB)
from 2012 till about 2017 ..."
62. In its objections/suggestions to the DG Report also, OP-4 did not dispute to having co-
ordinated for price increase with OP-1 and OP-3 in the State of Maharashtra since 2012
onwards. It submitted that it had given many more evidences to the DG with respect to
price co-ordination in the State of Maharashtra, which the DG does not seem to have
relied upon.
63. Mr. Kiran Kumar and Mr. Shekhar Ramamurthy of OP-1, in their statements recorded
before the DG, also admitted to having discussions with competitors before filing for
price revision notices with the State Authority in Maharashtra.
64. OP-1 submitted in its objections/suggestions to the DG Report that discussions with
competitors by sharing price cards containing information relating to basic price, bottle
deposit, distributor's margin and indicative cost of production were only in order to
incentivise consumers to purchase Beer in light of the difficulty faced by the Beer
industry due to policies of the State. With respect to this, the Commission notes that the
explanation offered by OP-1 is thoroughly misconceived and illogical. The policy of the
Suo Motu Case No. 06 of 2017 93
government seems to be to not re-imburse the returnable bottle deposit system. However,
to get the same from the government, the parties could not have illegally resorted to
sharing such commercially sensitive data with each other to allegedly approach the
government together. As such, it is not clear as to how is the policy of the government
responsible for the co-ordinated behaviour of the parties, much less any incentive for
consumer welfare, as pleaded.
65. Therefore, from the aforesaid evidences and admissions, price discussions and price co-
ordination amongst OP-1, OP-3 and OP-4 in the State of Maharashtra from at least 2011
to 2018 (OP-4 joining in in 2012) is seen, which the Commission finds to be in
contravention of the provisions of Section 3(3)(a) read with Section 3(1) of the Act as the
same were likely to cause an AAEC in the market.
66. Besides evidence regarding price co-ordination amongst OP-1, OP-3 and OP-4 in the
State of Maharashtra, the DG has also collected evidence that in the State of
Maharashtra, at least on one occasion in 2017, OP-1 and OP-4 even collectively decided
amongst themselves the strategy to oppose Government policy regarding hike in Excise
duty by deciding to stop production and supply of Beer in the State.
67. In this regard, the internal e-mails dated 17.01.2018 exchanged between Mr. Mahesh
Kanchan, Mr. Nilesh Patel and Mr. Anil Bahl of OP-4, which were submitted by OP-4
before the DG, may be referred to:
E-mail 1
Suo Motu Case No. 06 of 2017 94
E-mail 2
E-mail 3
E-mail 4
68. The Commission notes that, vide the first e-mail extracted above, Mr. Mahesh Kanchan
sent the industry sales volume of strong Beer in Maharashtra during for the preceding
four years to Mr. Nilesh Patel. From the table in his message, it is observed that the MRP
Suo Motu Case No. 06 of 2017 95
of strong Beer SKU has been increasing by ₹10/- every year in Maharashtra, and has
risen from ₹115/- in 2014 to ₹145/- in 2017. In his reply to such e-mail, i.e., e-mail 2,
Mr. Nilesh Patel commented that the yearly price increase did not have much impact of
the sales volume. However, the fall in sales volume in 2017 was "primarily driven by
conscious decision by UB and CIPL to starve the market ..."
69. In regard to the aforesaid e-mails, OP-4 submitted before the DG that "the conduct of UB
and CIPL in respect of limiting supply has to be viewed in the context of the arbitrary
decision of the State Excise Authority to revise the Excise policy overnight. This would
have resulted in the price of Beer increasing from INR 145 to INR 190 (approximately)
... In response to this increase in the Excise duty and until the time the Government
decided to implement the necessary change, the Beer companies (CIPL and UB) decided
to short-supply certain major SKUs in the market. The rationale for collectively deciding
to short-supply was to put pressure on the State Government to fix the Excise tax
calculation. CIPL limited its production in Maharashtra on 24 October, 2017 ..."
70. Though OP-1 has contended that the above e-mails are internal e-mails of OP-4 and the
DG has not collected any evidence to show that OP-1 was privy to this information
exchange or OP-1's involvement in this communication, it has, in its
objections/suggestions to the DG Report, acknowledged that it did disrupt the supply of
Beer in Maharashtra for a while in 2017 as a protest against the arbitrary increase in
Excise Duty by the State government.
71. Thus, in the view of the Commission, post hike in Excise duty in the State of
Maharashtra in 2017, it seems that OP-1 and OP-4 had decided to lower their production
in the State to create an artificial scarcity of Beer to put pressure on the Excise
Authorities to lower the Excise duty on Beer in the State. Such decision seems to have
been taken collectively by OP-1 and OP-4. This is evident from a holistic reading to the
communications exchanged between their officials. Such agreement between OP-1 and
OP-4 in 2017 to limit the supply of Beer in the State of Maharashtra, is presumed to have
an AAEC in the market, which the OPs have been unable to rebut in terms of the factors
stated under Section 19(3) of the Act. Hence, such conduct of OP-1 and OP-4, is found
Suo Motu Case No. 06 of 2017 96
by the Commission to be in contravention of the provisions of Section 3(3)(b) read with
Section 3(1) of the Act.
72. In addition to the above, the DG has also found the following evidences with respect to
OP-1, OP-3 and OP-4 sharing their periodical sales and sales data with each other, for
the State of Maharashtra:
(i) E-mail dated 22.12.2013 sent by Mr. Ganesh Shivaji Kedar of OP-1 to Mr.
Babasaheb Ramnath Dome of OP-4, which was submitted by OP-1 before the
DG:
Suo Motu Case No. 06 of 2017 97
(ii) E-mail dated 16.10.2014 sent by Mr. Ganesh Shivaji Kedar of OP-1 to Mr.
Abhijit R. Mahagaonkar of OP-4, which was submitted by OP-1 before the DG:
Suo Motu Case No. 06 of 2017 98
(iii) E-mail dated 11.08.2015 sent by Mr. Babasaheb Ramnath Dome of OP-4 to Mr.
Mahesh M. Mundhe of OP-1, which was submitted by OP-1 before the DG:
Suo Motu Case No. 06 of 2017 99
(iv) E-mail communications exchanged on 16.12.2017 between Mr. Mahesh M.
Mundhe of OP-1, Ms. Nivrutti Ugale of OP-3 and Mr. Babasaheb Ramnath Dome
of OP-4, which was submitted by OP-1 before the DG:
Suo Motu Case No. 06 of 2017 100
73. From the e-mail communications extracted above, it is noted that vide e-mail dated
22.12.2013, OP-1 shared the company's revenue details and targets in the State of
Maharashtra for the year 2013-14 with OP-4. The said details provided month-wise
break-up of the revenue earned by OP-1 from April 2013 till November 2013 as against
the targeted figures. Similarly, vide e-mail dated 16.10.2014, OP-1 forwarded OP-1's
revenue chart in the State of Maharashtra for the year 2014 to OP-4. The same showed
OP-1's revenue earned vis-à-vis the targets fixed for the year 2014-15. Thereafter, vide
another e-mail dated 11.08.2015, OP-4 also forwarded the company's stock dispatches in
the State of Maharashtra to OP-1. Further, from the e-mail trail dated 16.12.2017, it is
noted that on being asked by OP-1, OP-4 forwarded the company's stock position to OP-
1 and OP-3. The details furnished by OP-4 provided the figures of total production, stock
dispatches made and stock with distributors of the company.
74. From the afore-extracted e-mails, it is evident that OP-1, OP-3 and OP-4 were
exchanging their actual Beer production, revenue details, targets, stock sold and stock
held by the companies besides sharing details of their stocks lying with the distributors.
The DG has concluded that the aforesaid e-mails indicate that OP-1, OP-3 and OP-4
were monitoring the actual stock movements of each other within the distribution
channels so that the volume of Beer sold by individual companies is in conformity with
the 'understanding/agreement' reached between them and they can keep a track of each
other's market share. Such conduct of OP-1, OP-3 and OP-4 has been found by the DG
to be in contravention of the provisions of Section 3(3)(c) read with 3(1) of the Act.
75. However, OP-1 has argued that such discussions were at the behest of the State Excise
Department who required the OPs to submit data jointly, through WhatsApp groups that
were administrated by officials from State Excise Departments. The State Government of
Maharashtra itself had suggested that the OPs exchange information on WhatsApp
groups, namely 'Export from Aurangabad', 'Daily Production Dispatch Report' and
'Dispatch in Maharashtra'. The administrators of such WhatsApp groups were either the
Plant Excise Inspectors or representatives of the Excise Commissioner's Office. Thus, on
such WhatsApp groups, supply and dispatch information was required to be shared and
the State officials themselves mandated each brewery to compile and share commercially
sensitive data with other breweries in a prescribed format on regular/periodical basis.
Suo Motu Case No. 06 of 2017 101
76. OP-4 has also argued that during 2013-14, the Office of the Superintendent of Excise,
Aurangabad, had required all Beer companies to provide the above data, in a specific
format. The format was also provided by the Excise Department. However, the Office of
the Superintendent did not have any skilled staff members who could collect such data,
and accordingly, the Superintendent had deputed a person from OP-1 with the task of
collection of such data/information. As such, OP-1 would request all the Beer companies
to provide their data to OP-1 in the format specified by the Excise Department. Once this
data was collated by OP-1, it would be provided to the Excise Department. In certain
instances, OP-1 would provide its data in the format provided by the Excise department,
to aid OP-4 in submitting its data in the correct format.
77. With respect to the above arguments taken by OP-1 and OP-4, the Commission notes
that there is no explanation put forth by either OP-1 or OP-4 for OP-1, OP-3 and OP-4
sharing their revenue and target details with each other, which was not only historical
data, but also their prospective data. Further, it is also noted that though OP-1 has argued
that it was tasked with the collection of stock and supply data and submitting the same to
government, it was also sending its such data to the other OPs, for which there is no
explanation.
78. Thus, in the view of the Commission, the only rationale behind sharing of such
commercially sensitive data between OP-1, OP-3 and OP-4, is to help them keep track of
each other's market share and distribution, which amounts to allocation of market
between them. Under the provisions of Section 3 of the Act, since conduct of the OPs is
presumed to cause an AAEC in the market, which the OPs have been unable to refute in
terms of the factors stated under Section 19(3) of the Act, hence, amounting to
contravention of the provisions of Section 3(3)(c) read with 3(1) of the Act by OP-1, OP-
3 and OP-4.
Odisha
79. In respect of the State of Odisha having Corporation Market model, the DG has relied
upon the following evidences, to give a finding of price co-ordination amongst the OPs:
Suo Motu Case No. 06 of 2017 102
(i) E-mail communications dated 14-15.09.2009 exchanged between Mr. Kiran
Kumar of OP-1 and Mr. Nilojit Guha of OP-3, which were recovered during search
and seizure operation from the premises of OP-1:
E-mail 1
Suo Motu Case No. 06 of 2017 103
E-mail 2
(ii) Statement of Mr. Kiran Kumar of OP-1 regarding the e-mails dated 14-15.09.2009:
"We might have discussed the proposed prices for Orissa, and submitted
the price revision requests accordingly. To the best of my knowledge, this
was necessitated by the fact that we did not get any price increase for
almost 2 years."
(iii) Statement of Mr. Nilojit Guha of OP-3 regarding the e-mails dated 14-15.09.2009:
"Even though it appears that I have replied to the said email, I do not
remember the context of the email, since it is an email from 2009."
Suo Motu Case No. 06 of 2017 104
Subsequently, when confronted with other e-mails and WhatsApp communications
made by him containing anti-competitive discussions with competitors, Mr. Nilojit
Guha stated that:
"I do not deny having discussions with mainly Mr. Kiran Kumar on a few
occasions on the pricing issues. I recollect having contacted, Mr. Kiran
Kumar at times on pricing issues. For example, states like Delhi, Orissa,
Maharashtra, Karnataka, West Bengal mainly. In these pricing
discussions I played the role of a coordinator as per instruction of my
superior (Mr. Shalabh Seth) ... Whatever discussion I had with Mr. Kiran
Kumar was mainly with the intention that the industry gets the price
increase to recover the rising cost of raw materials. I never knew that this
comes under the purview of the Competition Commission of India...
...I now admit that at times I had coordinated with the competitor (mainly
with Mr. Kiran Kumar of UB) for application of our price requests in
certain States. This coordination role I had played mainly on the
instructions of my superiors who would fix the price and advise me to go
for the application for price revision in different States... These
interactions with the competitors did not benefit me personally, and this
has been done mainly with the intention to recover the increasing cost of
production."
(iv) E-mails dated 04-08.03.2010 exchanged between Mr. Sourav R. of OP-1 and Mr.
Kalyan Pattanaik and Mr. Nilojit Guha of OP-3 which were recovered during
search and seizure from the premises of OP-1:
E-mail 1
Suo Motu Case No. 06 of 2017 105
E-mail 2
E-mail 3
(v) Statement of Mr. Kiran Kumar of OP-1 regarding the e-mails dated 04-08.03.2010:
"As answered by me in the previous answer, Mr. Nilojit Guha and I might
have discussed our respective company's prices and aligned our prices
accordingly. The Kalyani Black Label is priced lower than other
mainstream Beers, and UBL's interest was to provide cost conscious
consumers the option of another brand at a lower price."
(vi) Statements of Mr. Nilojit Guha of OP-3 regarding the e-mails dated 04-08.03.2010:
"Having seen the email communication shown to me, I do not deny having
sent the email to Mr. Kiran Kumar, to which he replied back to me. Mr.
Kalyan Pattanaik was the Regional Sales Head of Rest of Central region
based in Mumbai. He had sent the proposed prices to Mr. Sourav of UB,
and on my calling for views from Mr. Kiran Kumar, Mr. Kiran Kumar
commented that he would like the differential between Kingfisher Strong
and Kalyani Black Label Strong to go forward."
Suo Motu Case No. 06 of 2017 106
(vii) MRP details of OP-3's brands in the State of Odisha furnished by OP-3 showing
changes in pricing of its comparable brands:
(viii) MRP details of OP-1's brands in the State of Odisha furnished by OP-1 showing
changes in pricing of its comparable brands:
80. From the e-mail trail dated 14-15.09.2009 extracted at point (i) above exchanged
between OP-1 and OP-3, the Commission notes that the top managerial level officers of
the two competing companies had exchanged their respective company's letters to
OSBCL for revision in their offer prices for supply to OSBCL, thereby exchanging their
offer prices in the State. Discussion on proposed prices for the State of Odisha has even
been admitted by the respective officials of OP-1 and OP-3 in their statements before the
DG extracted at points (ii) and (iii) above.
81. Further, from the e-mail communications dated 04-08.03.2010 extracted at point (iv)
above regarding communication of OP-3's proposed End Consumer Price ('ECP') after
new Excise Duty structure to OP-1, when seen and analysed in light of the data relating
Suo Motu Case No. 06 of 2017 107
to price increases submitted by OP-3 extracted at point (vi) above, it is noted that in
consonance with the pricing details communicated by OP-3 to OP-1, OP-3's MRPs of its
650ml bottles of Beer did increase to the figures conveyed in the e-mail. Thus, it is
evident that OP-3 exchanged its proposed prices with OP-1 for concurrence in March
2010 before approaching the Odisha State Government for approval, and after obtaining
the said approval, increased the prices of its Beer with effect from 01.04.2010, identical
to the figures communicated as 'New ECP with Duty Hike'.
82. Furthermore, upon analysis of the data relating to price increases submitted by OP-1
extracted at point (vii) above, it is noted that in consonance with the proposals sent by
OP-3 on 08.03.2010, OP-1 also raised the prices of its comparable Beer brands to figures
identical to that of OP-3 with effect from the same date, i.e., 01.04.2010.
83. As regards the insistence of Mr. Kiran Kumar of OP-1 vide e-mail dated 08.03.2010 to
keep 'current differential between KFS and KBLS going forward', it is observed from
the table extracted at point (viii) above that the MRPs of both KFS 650ml and KBLS
650ml were raised by ₹1 each, maintaining the price differential of ₹2 between their
prices.
84. Therefore, from the above trail of e-mails and pricing data of OP-1 and OP-3 for the
State of Odisha, price co-ordination between OP-1 and OP-3 is evident.
85. However, in this regard, OP-1 has submitted that its discussion as above was never
implemented in the market and there was no co-ordination in the EBPs on which the OPs
seek an increase. Further, it submitted that the OP's share of consumer prices in the State
have decreased over the last ten years evidencing that increase in MRP for consumers
was mostly due to increase in duties levied by the State Government. Therefore, the
communication evidence as aforesaid, relied upon by the DG, has not resulted in any
AAEC in India.
86. In the view of the Commission, any 'agreement' between competitors, which may or
may not have actually been implemented, if was even likely to cause an AAEC in India,
amounts to contravention of the provisions of Section 3(3) of the Act. Implementation of
Suo Motu Case No. 06 of 2017 108
such anti-competitive agreement or actual causing of AAEC is not a sine qua non for
establishing contravention.
87. Further, the Commission notes that OP-4 in its lesser penalty application, has
acknowledged that it was also a part of price co-ordination in the State of Odisha in 2015
and 2016.
88. As such, the Commission finds OP-1 and OP-3 guilty of price co-ordination in the State
of Odisha in 2009 and 2010 and OP-4 guilty of price co-ordination in the State of Odisha
in 2015 and 2016. As such price co-ordination was likely to stifle competition amongst
them and may cause AAEC in India, the same amounts to contravention of the
provisions of Section 3(3)(a) read with 3(1) of the Act.
89. In addition to the above, in the State of Odisha, the DG has also collected the following
evidences and reached a conclusion that in 2015-16, OP-1, OP-3 and OP-4, under the
umbrella of OP-5, had agreed to stop supply of Beer till there was a roll-back of 20%
reduction in EBP in the Excise Policy for 2015-16:
(i) E-mail communications dated 05-06.03.2015 exchanged between Mr. Shekhar
Ramamurthy of OP-1, Mr. Shalabh Seth of OP-3, Mr. Michel Jensen of OP-4 and
Mr. Sovan Roy of OP-5, which were recovered during search and seizure operation
from the premises of OP-5:
E-mail 1
Suo Motu Case No. 06 of 2017 109
E-mail 2
E-mail 3
E-mail 4
Suo Motu Case No. 06 of 2017 110
E-mail 5
E-mail 6
E-mail 7
Suo Motu Case No. 06 of 2017 111
E-mail 8
E-mail 9
E-mail 10
E-mail 11
Suo Motu Case No. 06 of 2017 112
(ii) Internal e-mails communications of 23-27.03.2015 exchanged between Mr. Anil
Bahl, Ms. Sukanta Banerjee, Mr. Michael Jensen, Mr. Dhiraj Kapur and Mr. Nayan
Nanda Bal of OP-4:
E-mail 1
E-mail 2
E-mail 3
E-mail 4
Suo Motu Case No. 06 of 2017 113
E-mail 5
E-mail 6
E-mail 7
(iii) E-mail communications of March-April 2015 exchanged between Mr. Shekhar
Ramamurthy of OP-1, Mr. Shalabh Seth and Mr. Manish Shyam of OP-3, Mr.
Michel Jensen and Mr. Dhiraj Kapur of OP-4 and Mr. Sovan Roy of OP-5, which
were recovered during search and seizure operation from the premises of OP-5:
Suo Motu Case No. 06 of 2017 114
E-mail 1
E-mail 2
E-mail 3
Suo Motu Case No. 06 of 2017 115
E-mail 4
E-mail 5
E-mail 6
Suo Motu Case No. 06 of 2017 116
E-mail 7
E-mail 8
E-mail 9
Suo Motu Case No. 06 of 2017 117
E-mail 10
Suo Motu Case No. 06 of 2017 118
E-mail 11
E-mail 12
E-mail 13
Suo Motu Case No. 06 of 2017 119
E-mail 14
E-mail 15
E-mail 16
Suo Motu Case No. 06 of 2017 120
E-mail 17
E-mail 18
Suo Motu Case No. 06 of 2017 121
E-mail 19
E-mail 20
E-mail 21
Suo Motu Case No. 06 of 2017 122
E-mail 22
E-mail 23
Suo Motu Case No. 06 of 2017 123
E-mail 24
90. From the e-mail trails extracted at points (i), (ii) and (iii) above, the Commission notes
that the OPs had both e-mail communications as well as conference calls to discuss their
strategy to oppose Odisha Government's Liquor Excise Policy for 2015-16 wherein the
EBP and Ex-Distributor Prices ('EDP') were reduced by 20% and 10% respectively,
over the previous year's rates. The Managing Directors and other senior officers of OP-1,
OP-3 and OP-4 and the Director General of OP-5 collectively decided to file a writ
petition before the Hon'ble Odisha High Court against the so called 'abuse of power' by
the Odisha Government. The aforesaid e-mails make it evident that there was close co-
ordination amongst the OPs to collectively oppose the executive decision of the State
Government by stopping supplies to the State Corporation in protest. OP-5 also, on its
part, facilitated such anti-competitive contacts between its members by routing the e-mail
Suo Motu Case No. 06 of 2017 124
communications to other members and arranging conference calls between the Managing
Directors of its member companies, wherein they discussed and aligned their future
business strategies.
91. In its submission before the DG in this regard, OP-4 has admitted that consequent to the
20% EBP reduction by Odisha Government, "all Beer companies decided to limit supply
of Beer in Orissa and refused to sign the agreement. The curtailment of supply took place
through AIBA and Mr. Shekhar Ramamurthy. Mr. Michael Jensen, Mr. Shalabh Seth,
Mr. Sovan Roy, Mr. Dhiraj Kapur, Mr. Manish Shyam, Mr. Perry Goes and Mr. Chris
White had discussions on this issue ... As a result of the stand-off, there was no Beer
supply in May 2015 in Orissa."
92. Further, in his statement recorded on oath before the DG, Mr. Michael Jensen of OP-4
stated that:
"The earlier Excise policy had expired, and CIPL was under no obligation to
make supplies. There was an offer from Orissa Government to effectively reduce
EBP by 20% in its new policy, resulting in loss making sales in the State. Based
on this unprecedented, one-sided policy suggestions from the Orissa State
Government, the breweries jointly decided not to entertain, and participate in
the new policy ... The breweries jointly decided to move this case to the High
Court of Orissa and ... the Court decided upon an interim solution where part of
the decrease in EBP amounting to 7.5% would be put in an escrow account until
further agreement was settlement between the parties within a year. Under these
guidelines, the parties decided to resupply in Orissa within a month ... This
contentious point is still unsolved four years later, and the situation led to CIPL
stopping the sale of non-premium products, like Tuborg, reducing our Orissa
market share from previously +20% to less than 8%."
93. Similarly, Mr. Shekhar Ramamurthy of OP-1 also stated before the DG in his statement
that:
"The background to this is that the State Excise unilaterally decided to drop our
basic price by 20% and increase duties. There was no opportunity provided to
companies to discuss. The Beer manufacturers viewed this action by the Orissa
State Excise as a very dangerous policy precedent wherein States would have
the ability not just to prevent price increases but also be able to reduce our
prices. In our view, this was coordinated activity by Beer manufacturers to
petition the Government against this unjust decision. In fact, we moved the High
Court and the High Court decision was to place the difference between the old
Suo Motu Case No. 06 of 2017 125
offer price and the reduced offer price in an escrow account till the matter
would be legally resolved. After a year, the High Court ruled in favour of
manufacturers and we were allowed to reinstate our old prices. To the best of
my knowledge, the companies filed separate petitions before the High Court but
all these were heard and decided jointly ..."
94. Mr. Kiran Kumar of OP-1 also stated before the DG, as under:
"... In Odisha, 2-3 years ago when the Government increased duty and reduced
manufacturers prices, through AIBA we had discussions wherein we discussed
pricing and the way forward to work with the Government to rationalise the
pricing."
95. When Mr. Sovan Roy, Director General of OP-5 was questioned about the aforesaid e-
mail trails during his deposition before the DG, he stated that:
"In the new Excise policy framed by the Orissa Government, there was a
suggestion from the Government to enforce the bottling fee of around Rs. 40/-
within the ex-brewery price supplied to the Corporation. This being a
substantial sum, the members got agitated and wanted AIBA to represent the
case to the Authorities concerned. AIBA failed to get reprieve from the Excise
Commissioner and subsequently representations were drafted and presented to
the Chief Secretary. The conclusion was that till the decision of the Price
Negotiating Committee (PNC) the breweries will have to absorb the additional
cost. Some of the member breweries seemed agitated on this. Meanwhile, a
retailer approached the high court but no permanent order was granted by the
court. Subsequently, the breweries continued to make supplies."
96. Thus, evidently, in 2015-16, post reduction of EBP and EDP by the State of Odisha
through its Excise Policy, OP-1, OP-3 and OP-4 stopped supply of Beer in the State of
Odisha to force the State Corporation to roll-back the Excise Policy, apart from filing a
writ petition in this regard before the Hon'ble Odisha High Court. Discussions in this
regard, to take concerted actions against the decision of OSBCL, was taken through the
platform of OP-5.
97. Though OP-1 has argued that disruption of supplies had lasted less than two months,
with the OPs restricting supplies at different times even though the broad range of the
timing of such stoppage was the same, in the view of the Commission, the very fact of
co-ordinated disruption of supply amounts to an anti-competitive agreement amongst the
OPs.
Suo Motu Case No. 06 of 2017 126
98. Further, OP-1 has argued that (i) the OPs had implemented supply restrictions only as a
means to present their countervailing power in response to monopsony power of the
State Government; (ii) that the DG did not acknowledge the effects of such regulation by
the State Government which resulted in an increase of MRP by ₹16 per bottle on KFS
650ml, which would have to be ultimately borne by the end consumers and would
potentially lead to decrease in the sale of Beer in the State; (iii) that the Hon'ble High
Court of Odisha also ruled in favour of the Beer manufacturers which validated the stand
of the Beer manufacturers; and (iv) that the OPs resumed supply once the Hon'ble
Odisha High Court placated the Beer manufacturers by offering them interim remedy.
99. However, the Commission is of the view that stoppage of supply by OP-1, OP-3 and OP-
4 of Beer to OSBCL around the same time in 2015, even if in response to reduction in
EBP rates by the State, violated the law being a concerted action amongst the OP-1, OP-
3 and OP-4 to limit supplies. In fact, though OP-1 has tried to blame OSBCL for the
likely loss which would be caused to the consumers as a result of increase in MRP of
Beer, the Commission notes from the e-mails extracted at point (iii) above that such
concerted action amongst OP-1, OP-3 and OP-4, through the platform of OP-5, had led
to OSBCL proposing to increase MRP of Beer for the consumers, which was a
consequence of the co-ordinated action of the OPs only.
100.OP-5 has also argued that (i) it was not in the loop regarding discussions amongst its
members to stop supplies to OSBCL; (ii) it was not involved in the legal case/petition
filed before Hon'ble Odisha High Court at any time; (iii) parties stopped supplies
because they did not want to weaken their case before the Hon'ble High Court by
making supplies in the meanwhile in terms of the new policy under challenge; and (iv) as
the conduct of the OPs was not motivated with any view to fix prices/increase EBPs, no
meaningful anti-trust sense can be attributed to the conduct of the OPs.
101.The Commission however, notes that all discussions pointed towards taking some
concerted action against the OSBCL policy, took place through the platform of OP-5
only. In fact, OP-4, in its submission to the DG, has stated that "all Beer companies
decided to limit supply of Beer in Orissa and refused to sign the agreement. The
curtailment of supply took place through AIBA and ...".
Suo Motu Case No. 06 of 2017 127
102.Thus, the agreement between the OPs in 2015-16, to limit the supply of Beer in the State
of Odisha, in terms of Section 3 of the Act, is presumed to have an AAEC within India,
which effect the OPs, have been unable to rebut in terms of the factors stated under
Section 19(3) of the Act. Therefore, such limiting of supply by the OPs is held by the
Commission to be in contravention of the provisions of Section 3(3)(b) read with Section
3(1) of the Act.
Puducherry
103.In respect of the UT of Puducherry having Free Market model, the DG has relied upon
the following evidences to give a finding of cartelisation amongst the OPs:
(i) Internal e-mail communications exchanged in February 2017 between Mr.
Probal Dutta, Mr. Justin Raj, Mr. Arvind Sharma and Mr. Anil Bahl of OP-4,
which were submitted by OP-4 before the DG:
E-mail 1
-
E-mail 2
Suo Motu Case No. 06 of 2017 128
E-mail 3
Suo Motu Case No. 06 of 2017 129
E-mail 4
E-mail 5
Suo Motu Case No. 06 of 2017 130
E-mail 6
E-mail 7
E-mail 8
Suo Motu Case No. 06 of 2017 131
E-mail 9
E-mail 10
E-mail 11
(ii) Messages exchanged between Mr. Kiran Kumar of OP-1 and Mr. Deepak
Malhotra of OP-3, which were recovered during search and seizure operation
from the iPhone of Mr. Kiran Kumar of OP-1:
Suo Motu Case No. 06 of 2017 132
Messages exchanged between Mr. Anil Bahl of OP-4 and Mr. Nilojit Guha of
OP-3, which were recovered during search and seizure operation from the
iPhone of Mr. Kiran Kumar of OP-1 as he was CC'd in the message:
(iii) Comparative prices of strong Beer SKUs of OP-1, OP-3 and OP-4 in the UT of
Puducherry, as tabulated by the DG from the replies of OP-1 and OP-3:
Suo Motu Case No. 06 of 2017 133
104.From the February 2017 trail of e-mails extracted at point (i) above, the Commission
notes that Mr. Anil Bahl had been keeping track of discussions of OP-4 with competitors
about the price revisions made by the company in the UT of Puducherry (earlier called
Pondicherry). On 14.02.2017, Mr. Justin Raj (Sales Manager - Puducherry and Kerala)
reported about competitors' plan about their price changes. On a proposal to increase the
price of OP-4's TBS 650ml bottle from ₹75/- to ₹80/-, Mr. Bahl asked Mr. Justin Raj to
check with the competitors about the decision taken in the industry. Mr. Justin Raj
reported back that "as confirmed by UB team, 99% chance of increasing MRP to Rs. 80
... SAB no changes".
105.Further, from the messages exchanged between Mr. Kiran Kumar of OP-1 and Mr.
Deepak Malhotra of OP-3 extracted at point (ii) above, the Commission notes that, in his
message conversation with Mr. Deepak Malhotra, Mr. Kiran Kumar asks about the
progress in Puducherry and West Bengal. Mr. Deepak Malhotra replies that OP-3 is
working on rounding off the MRP in Puducherry and going for a ₹10/- increase in West
Bengal.
106.Similarly, it is noted from the messages exchanged between Mr. Nilojit Guha of OP-3
and Mr. Anil Bahl of OP-4 extracted at point (iii) above that, in his message conversation
with Mr. Anil Bahl of OP-4, Mr. Nilojit Guha asks Mr. Bahl for confirmation about OP-
4's implementation of the understanding reached between them. Such message was also
CC'd to Mr. Kiran Kumar of OP-1. In response, Mr. Bahl intimated about OP-4's
Suo Motu Case No. 06 of 2017 134
agreement on Puducherry proposal and OP-4's plan to increase prices of Carlsberg
Elephant and Carlsberg Mild Beer to ₹110/- and ₹105/- respectively.
107.When the price increases in the UT of Puducherry in 2017 as tabulated at point (iv)
above are seen in light of the aforesaid message communications exchanged and OP-4's
afore-extracted internal e-mails, it is apparent that both OP-1 and OP-4 increased their
MRPs of Strong Beer SKUs to identical figures of ₹80/- as proposed. However, price
revisions, if any, made by OP-3 in the MRP of its H5K 650ml bottle and by OP-4 for its
Elephant and Mild Beer variants in February-March 2017 in the UT of Puducherry, are
not available.
108.Though OP-1 has argued that the internal e-mails exchanged among officials of OP-4
cannot be relied upon as evidence against it, as it was neither confronted with these e-
mails during the course of the investigation nor allowed to offer any
explanation/clarification regarding its lack of involvement/knowledge of the referred
communications, which highlights serious flaws in the DG's investigation process, the
Commission is of the view that the messages to which Mr. Kiran Kumar of OP-1 was
privy to, and the identical increase in prices at the same time as competitors in line with
the discussions being made in the internal e-mails of OP-4, are sufficient evidence of
involvement of OP-1 in price co-ordination in the UT of Puducherry in 2017.
109.Hence, the above communications and actual price revisions made by OP-1 and OP-4 in
conformity with their discussions, are clear indication of the fact that OP-1, OP-3 and
OP-4 were in close touch with each other in 2017 regarding their price revision proposals
in the UT of Puducherry. OP-4 has also not denied its such conduct, in its
objections/suggestions to the DG Report. Thus, since such price co-ordination between
OP-1, OP-3 and OP-4 is presumed to have an AAEC within India under the provisions of
Section 3(3) of the Act, which effect the OPs have been unable to rebut, the same is held
by the Commission to be in contravention of the provisions of Section 3(3)(a) read with
3(1) of the Act.
Suo Motu Case No. 06 of 2017 135
Rajasthan
110.In respect of the State of Rajasthan having the Corporation Market model, the DG has
relied upon the following evidences to give a finding of price co-ordination amongst the
OPs:
(i) E-mail communications dated 05.06.2015 exchanged between OP-1, Mr. Shalabh
Seth of OP-3, Mr. Michael Jensen of OP-4 and Mr. Sovan Roy of OP-5, which
were recovered during search and seizure operation from the premises of OP-1
and OP-5:
E-mail 1
E-mail 2
Suo Motu Case No. 06 of 2017 136
E-mail 3
(ii) Letter dated 23.11.2016 sent by OP-5 to the Secretary, Finance and Revenue,
Government of Rajasthan, requesting a price increase on behalf of its member
companies:
Suo Motu Case No. 06 of 2017 137
(iii) Statement of Mr. Sovan Roy, Director General of OP-5, regarding the e-mail trail
dated 05.06.2015 and the letter dated 23.11.2016:
"Individual breweries supplying to RSBCL had submitted rates for price
increase directly to the Excise Commissioner who was the MD of the
RSBCL Corporation. AIBA was following up with the department the issue
of not having granted rate increase to the breweries over a considerable
period of time. The department continued to increase the Excise duty
during this period from 146% to 150%. The suggestion was that since the
MRP was going up because of the department having changed the duty
structure from 90 to 98, there was a suggestion if this could be taken up to
100. Ultimately, no change in pricing was granted or sanctioned by the
Government."
When asked as to how the EBP of exactly ₹265.43 for the State of Rajasthan was
arrived at by all three competitors as mentioned in the attachment in the letter
dated 23.11.2016 sent by OP-5 to the Secretary Finance and Revenue,
Government of Rajasthan, Mr. Sovan Roy replied that:
"As per the liquor sourcing policy of the Rajasthan Govt., individual
brewers who wish to supply to RSBCL need to fill the details of the cost
with justification sheet in the format prescribed by RSBCL. The RSBCL
reviews and conveys the pricing to the brewers directly. In this
determination of price by the department, AIBA is not involved or present.
Suo Motu Case No. 06 of 2017 138
... The prices referred above as an example was conveyed to illustrate the
point for making grounds for increase in prices. The arrival of the price of
Rs. 265 and the mode by which it was arrived at, was not to my knowledge.
To that extent, I was privy to the price."
On being asked to explain the communication of Mr. Shalabh Seth regarding
increasing duty from x% to y%, and for inflation-led price increases, Mr. Roy
stated that:
"Since there was no rate increase coming for years and the department's
revenue in terms of percentage was fixed at 146%, he recommended to
make an offer to the department to increase to 150% in which case the
MRP would go from Rs. 90 to Rs.98. The ground to be explained to the
department is that with the increase in MRP, the revenue to the
department would improve, and at the same time the bottling fees, which
was imposed on the brewers in in their EBP, be allowed to be passed on."
(iv) Statement of Mr. Shalabh Seth of OP-3 regarding e-mail trail dated 05.06.2015:
"This response was written in my capacity as Chairman of All India
Brewers Association (AIBA). The advice was that Excise duty is a
prerogative of the respective State Governments and the respective
companies should focus on bottling fees reimbursement and increase in
input costs while requesting the State Govt for price increase.
The email ID used by me as Managing Director of SABMiller India and
Chairman of AIBA was the same. As stated earlier, as AIBA Chairman and
Member, I have advised to stick to escalation in costs and reimbursement
of bottling fees as representation to the State Government."
When confronted with the fact that, as Managing Director of OP-3 and also as
Chairman of OP-5, he used to have discussions of prospective pricing quotes with
his counterparts in competitor companies and had also been privy to prospective
pricing quotes of the competitors, he stated that:
"I have tried to stick to only discussions around industry issues and
specific State policy related issues without getting into any price
discussion. ... I am not denying the contents and the receipt of the email."
And during his subsequent deposition, he stated that:
"RSBCL had last provided price increase in 2014 which was a minor
increase. In 2015 policy, the State Government assured of price increase
Suo Motu Case No. 06 of 2017 139
but it never materialised. Similarly, the issue was raised along with 2016
policy, as well. In April 2016, the supplies were not made for about one
week to RSBCL. Thereafter, the companies individually accepted the
orders after assurances by the State Govt. In my mail, I had agreed to go
in with the approach suggested by Mr. Shobhan Roy to go in for cost
pushes by individual companies."
(v) Statement of Mr. Shekhar Ramamurthy of OP-1 regarding e-mail trail dated
05.06.2015:
"The context is that despite the policy in 2014 stating that manufacturers
would be allowed free pricing, State Excise did not permit it. We jointly, as
an industry body, represented to the Government that we should be
allowed a reasonable increase to cover our inflationary costs. We also
represented to the State that additional levies that they had imposed on us
should be reimbursed to us, else our effective basic price was coming
down. ... I do not recollect the computation of the details of the pricing,
but I do recollect that it was to cover inflation. The Government would
allow uniform prices for all competitors and not allow us separate prices.
In this light, we decided to go for a round-off figure of Rs. 100 for the
benefit of the consumers (who otherwise would have been overcharged by
trade)."
(vi) Statement of Mr. Kiran Kumar of OP-1 regarding e-mail trail dated 05.06.2015:
"In Feb-Mar 2015, the Rajasthan govt. announced the Liquor Sourcing
Policy for the year, and all companies submitted their prices.
Subsequently, the bottling fee was increased in the State, and when the
pricing was fixed, neither the bottling fee reimbursed to companies nor
was the price increase applied for allowed. The Principal Secretary and
Secretary, Finance, upon their request, were met by AIBA to request them
to reimburse the increase in bottling fee to companies, as well as to allow
the price increase sought by companies in accordance with the LSP for the
year. From the email it appears that there was also an apprehension that
Excise duty would also be increased in the course of 2015, and it appears
from the mail that there were some discussions with Principal Secretary
and Secretary, Finance on the quantum of increase and its impact on the
MRP. For the record, neither was the price increase granted nor the
increase in bottling fee reimbursed. I was not part of the discussions that
took place in the emails, and I do not actually know about their contents.
Suo Motu Case No. 06 of 2017 140
The said emails were marked to me to keep me in the loop, being the Head
of Sales."
(vii) Statement of Mr. Michael Jensen of OP-4 about his suggestion to ask for price
increase of ₹100 in the e-mail dated 05.06.2015:
"The rationale for advising the price increase to Rs. 100 is that in reality a
price point of Rs. 98 would have led retailers to ask for Rs. 100 from the
consumers. Since the MRP of Rs. 98 would have been an absurdity in the
absence of ready availability of small coins, so in all instances we always
recommended pricing point in multiple of either Rs. 5 or Rs. 10, and
ideally only Rs. 10 pricing multiple. Since small change is not readily
available in the market, therefore such pricing points would have led to
price inflation at retailers."
(viii) Comparative MRPs of strong Beer SKUs of OP-1, OP-3 and OP-4 in the State of
Rajasthan, as tabulated by the DG from the replies of OP-1, OP-3 and OP-4:
(ix) E-mail dated 19.04.2016 sent by Mr. Amit Sahni of OP-1 to Mr. Manish Shyam
of OP-3, which was recovered during search and seizure operation from the
premises of AB InBev:
Suo Motu Case No. 06 of 2017 141
E-mail 1
Suo Motu Case No. 06 of 2017 142
Suo Motu Case No. 06 of 2017 143
(x) Internal e-mail communications dated 18-19.04.2016 exchanged between Mr.
Manish Shyam, Mr. Amit Taneja, Mr. Tejvir Singh and Mr. Suyog Karajgi of
OP-3, which were recovered during the search and seizure operation from the
premises of AB InBev:
E-mail 1
E-mail 2
E-mail 3
E-mail 4
Suo Motu Case No. 06 of 2017 144
E-mail 5
(xi) Statement of Mr. Manish Shyam of OP-3 regarding exchange of e-mails by him:
"... In most of the States, even though individually the companies would
request for price increase, they would also collectively approach the
Government, primarily to show that the request for price increase is by
everyone, and in some way to put pressure on the State Government for a
price increase. In particular, Rajasthan Principal Secretary-Revenue had
requested all companies to submit justification for a price increase in a
specified format which he would then use to convince the Govt. for a price
increase. He had requested that the input costs of specific items to be
shared with him in the prescribed format. The main intention behind it was
to keep the Beer prices in Rajasthan lower than the neighbouring States,
so as to avoid bootlegging and lowering of the Government revenue. He
asked for Malt, sugar, maize, fuel, bottle cost, labour, electricity costs
from each company. For this purpose, Mr. Amit Sahni of UBL (Sales Head
in Rajasthan), shared UB's input costs with me, and I forwarded it to our
Finance Team for perusal and preparation of SABMiller's input cost
figures."
On being specifically asked about the e-mails dated 18-19.04.2016 (erroneously
typed as 2015 in the statement), Mr. Manish Shyam stated that:
"Mr. Suyog Karajgi and Mr. Denis Gohel are from Finance department of
SABMiller. On being asked by PSF Rajasthan to submit individual price
break up of the input cost, SABMiller got the justification letters submitted
by Carlsberg and UBL, which were forwarded to our Finance guys so that
SABMiller's cost justification letter was prepared in 'similar lines' without
any major variation. By the term 'similar lines', I meant that the
components/line items of the input costs should be on identical pattern, so
as to facilitate the PSF to compare the figures of respective companies."
Suo Motu Case No. 06 of 2017 145
(xii) Internal e-mail communications dated 27.04.2016 exchanged between Mr. Suyog
Karajgi, Mr. Amit Taneja, Mr. Manish Shyam and Mr. Manoj Srivastava of OP-
3:
E-mail 1
E-mail 2
(xiii) Statement of Mr. Manish Shyam of OP-3 regarding OP-3's internal e-mails dated
27.04.2016:
"I was given this proposal to be submitted by Mr. Suyog Karajgi which
was decided by the top management. I further went ahead and submitted
the proposal to the Government for price increase. I am aware of the said
emails, only in so far I was directed to submit the proposals flowing from
the decision of the top management. I was not part of the decision making
process."
(xiv) Comparison of MRPs of highest selling SKU, i.e., strong Beer 650ml bottle -
KFS of OP-1, H5K of OP-3/AB InBev and TBS of OP-4, in the State of
Rajasthan over the period 2011-18, as culled out from their replies submitted to
the DG, tabulated and graphically demonstrated by the DG:
Suo Motu Case No. 06 of 2017 146
Suo Motu Case No. 06 of 2017 147
(xv) Statement of Mr. Shekhar Ramamurthy of OP-1:
"... the Rajasthan Government controls every aspect of pricing. However,
in the policy of 2014 they had allowed free pricing. Nevertheless, they
were pressurising the industry to continue supplies at old prices. It is in
this context that the AIBA members asked the DG of AIBA to seek a
meeting with the Excise Commissioner to seek clarity on the policy.
Thereafter, as per the policy, the Excise allowed the price increase we
were seeking..."
"... In Rajasthan, since 2014 the State has denied us a price revision and
the AIBA platform was used to discuss with the Excise department, often at
the behest of the State ... In Rajasthan specifically, since the Government
had not given a price revision of the basic price since 2014, there have
been discussions largely over telephone between CEOs/Presidents of
CIPL, SAB Miller and UBL, and may be ABI as well, regarding petitions
to be made to the Excise department for a basic price increase."
(xvi) Statement of Mr. Manish Shyam of OP-3:
"... On being asked by PSF, Rajasthan to submit individual price break up
of the input cost, SABMiller got the justification letters submitted by
Carlsberg and UBL, which were forwarded to our Finance guys so that
SABMiller's cost justification letter was prepared in 'similar lines' without
any major variation ..."
(xvii) E-mail communications exchanged between Mr. Kiran Kumar and Perry Goes of
OP-1, Mr. Manish Shyam and Mr. Devashish Dasgupta of OP-3, Mr. Dhiraj
Kapur of OP-4 and Mr. Sovan Roy of OP-5 in October 2016:
E-mail 1
Suo Motu Case No. 06 of 2017 148
E-mail 2
E-mail 3
E-mail 4
Suo Motu Case No. 06 of 2017 149
E-mail 5
E-mail 6
(xviii) Statement of Mr. Shekhar Ramamurthy of OP-1 who was the former
President/Chairman of OP-5, on the role of OP-5:
"... we have used AIBA to represent to State Governments, specifically
Rajasthan and Odisha with respect to an industry grievance on pricing ...
In Rajasthan specifically, since the Government had not given a price
revision of the basic price since 2014, there have been discussions largely
over telephone between CEOs/Presidents of CIPL, SAB Miller and UBL,
and may be ABI as well, regarding petitions to be made to the Excise
department for a basic price increase. The platform for these discussions
was AIBA and the DG of AIBA was meant to coordinate the petitions and
discussions between the companies and the State Excise department."
Suo Motu Case No. 06 of 2017 150
(xix) Statement of Mr. Manish Shyam of OP-3:
"I did attend the meeting in December 2015 with Mr Pravin Gupta, PSF,
Rajasthan requesting him for a price increase to which he again said that
he would follow it up with the Government. The meeting was also attended
by Carlsberg and UB. After individual companies had submitted their
respective proposals, they followed it up with the Excise Commissioner
and the PSF, Rajasthan under umbrella of AIBA, so that collectively there
would be better chances of getting a price increase. The decision to go
through AIBA was taken by the top management."
(xx) Statement of Mr. Sovan Roy of OP-5 on role of OP-5:
"... AIBA in good faith was pursuing with Rajasthan govt. to increase the
price in view of the cost increase. Thereafter, the matter was put up in the
aforesaid Board meeting and it was decided not to pursue the case for
Rajasthan. I recollect that AB InBev suggested that AIBA should not
pursue the Rajasthan price hike as it may be violative of CCI rules. But
other members were not sure that there is a violation."
"We were aware on the issues of CCI with regard to cartel formation.
However, subsequently one of our member companies in our Board
meeting in November 2016 also mentioned the issue. In subsequent Board
meeting in January 2017, it was recorded that AIBA would desist from
pursuing the rate increase issues especially in Rajasthan. This was,
however, objected to by the minor market share holder/members, who
strongly felt that the Corporation who are monopolistic and control every
aspect of the business, can be approached for discussions."
111.From the e-mail communications of 05.06.2015 extracted at point (i) above, it is noted
that there was close interaction between the top management of OP-1, OP-3 and OP-4
and the Director General of OP-5, regarding co-ordination of price increase to be asked
for from Rajasthan Excise Department for Strong category Beers. In his e-mail, Mr.
Sovan Roy of OP-5 proposed strategies for raising Excise Duty from 146% to 150% and
going in for price increase requests. Mr. Sovan Roy categorically suggested that the
companies could increase retail price to ₹98 in the category where current EBP was ₹265
per case and MRP ₹90 per bottle. On further suggestion by OP-1 to ask for raise of MRP
to ₹100, Mr. Michael N. Jensen of OP-4 conveyed his agreement.
Suo Motu Case No. 06 of 2017 151
112.While in his statement recorded on oath before the DG extracted at point (vii) above, Mr.
Jensen tried to justify the request for raising MRP to a round-off figure of ₹100, Mr.
Shekhar Ramamurthy of OP-1 admitted in his statement extracted at point (v) above that
OP-1, OP-3 and OP-4 had jointly represented to the Rajasthan Government for a price
increase. On his part, Mr. Shalabh Seth of OP-3, in his statement extracted at point (iv)
above, also suggested to his counterparts in competing companies to ask for inflation led
price increase.
113.Thus, the e-mails dated 05.06.2015 and statements of key managerial personnel of the
OPs regarding the same clearly show that OP-1, OP-3, OP-4 and OP-5 were hands in
glove while making price increase requests in the State of Rajasthan.
114.OP-5, in its objections/suggestions to the DG Report has tried to explain the context
behind such communications by stating that since the OPs were seeking re-imbursement
of Bottling Fees imposed upon them in the State of Rajasthan, it was suggested by OP-5
that to recoup the losses, RSBCL may increase the excise duty on Beer and thereby let
MRP go up without any EBP increase. As per OP-5, there is nothing wrong in making of
such suggestion to RSBCL.
115.In the view of the Commission, the above argument put forth by OP-5, does not explain
the entire picture regarding the conduct of OP-5. From the e-mails extracted at point (i)
above, the Commission notes that OP-5, apart from suggesting increase in excise duty to
the government, also suggested the likely future MRP, which may be fixed by the
parties.
116.Further, from the letter dated 23.11.2016 extracted at point (ii) above, which was sent by
Mr. Sovan Roy of OP-5 to the Secretary-Finance and Revenue, Government of
Rajasthan, it is noted that the industry association OP-5 had been taking up the task of
making representations and making suggestions for price increase for OP-1, OP-3 and
OP-4 to the Government. The attachment to the said letter shows that the EBP of OP-1's
KFS 650ml, OP-3's H5K 650ml and OP-4's TBS 650ml were identical for Rajasthan at
exactly ₹265.43. Besides, the MRP per bottle of these SKUs in the State were also
identical at ₹90. From the said attachment, it is also observed that the EBP of KFS and
Suo Motu Case No. 06 of 2017 152
H5 in the States of Madhya Pradesh, Telangana and Andhra Pradesh were also identical
down to the last paisa.
117.It is noted from the DG Report that the brewery plants of these manufacturers in the State
of Rajasthan are situated at different locations at a distance of approximately 60 to 80
kms from each other. Thus, despite the manufacturing cost per unit of Beer for these
OPs, having different manufacturing locations, production capacities and different
efficiency levels, it is surprising that their prices of beer were identical down to the last
paisa. The only reasonable explanation for the same seems to be explicit understanding
and collusion amongst them.
118.In fact, in the e-mails extracted at point (xvii) above, OP-5 itself suggested that such
collective data being submitted to the government by OP-5 may amount to cartelisation
and as such, individual representation to the government may be given. Hence, evidently,
OP-5's role was not limited to making some suggestion to RSBCL about increase in
excise duty, but exceeded far more than that; and OP-5 was also well aware that its such
activities may amount to infringement of competition law, yet it continued to indulge in
such conduct.
119.Further, from the analysis of the pricing data of Strong Beer 650ml SKUs in the State of
Rajasthan extracted at point (viii) above, it is observed that the prices of the top-selling
Beer SKUs of the OPs (KFS of OP-1, H5K of OP-3 and TBS of OP-4 in 650 bottle
category) were revised in close tandem. OP-1 and OP-4 together raised the MRP of their
brands on 01.04.2016, and OP-3 followed closely on 07.04.2016 to identical price level.
Again on 01.04.2017, OP-1 and OP-4 together hiked their prices further to ₹97. The
MRP of OP-3's H5K 650ml bottle also went up to the same level in 2017, though the
actual date of such revision is not known. In the next year, OP-1 and OP-4 increased
their MRPs further to ₹100 on 22.06.2018 and 23.06.2018 respectively, and OP-3 also
had its price of ₹100 (actual date of price revision is not known).
120.Not only the above, from the e-mail communications dated 18-19.04.2019 extracted at
point (ix) above, it is noted that Mr. Manish Shyam of OP-3 had received from Mr. Amit
Sahni of OP-1, the letter submitted by OP-1 to RSBCL for justification of OP-1's price
revision requests. From the internal e-mails of OP-3 dated 18-19.04.2019 extracted at
Suo Motu Case No. 06 of 2017 153
point (x) above, it is noted that Mr. Manish Shyam forwarded the said e-mail of OP-1
and similar justification letter received from OP-4, to Mr. Tejvir Singh and Mr. Suyog
Karajgi of OP-3. In accordance with the same, OP-3 also gave its justification to
RSBCL, which is evidenced from the e-mails dated 27.04.2016 extracted at point (xii)
above.
121.Thus, from such e-mail communications, it is apparent that even when the OPs got
individual notices from the Excise Authorities asking for justification for seeking price
increase, they co-ordinated amongst themselves and exchanged their replies to be
submitted to the Excise Authorities. This seems to have been done primarily to align
their replies giving identical reasons for seeking the price increase, and putting up a
united stand before the Excise Authorities.
122.Furthermore, from analysis of the pricing data from 2011 to 2018 of Strong Beer 650ml
Beer SKUs in the State of Rajasthan furnished by the OPs before the DG, which the DG
has tabulated as extracted at point (xiv) above, it is observed that the prices of the top-
selling Beer SKUs of the OPs (KFS of OP-1, H5K of OP-3 and TBS of OP-4 in 650
bottle category) were revised in tandem. The MRPs of OP-1 and OP-3 were initially
identically priced at ₹75/- on 01.06.2011, with OP-4 being priced higher at ₹80/-. On
01.04.2012, OP-4 upped the price of TBS to ₹82/-, while OP-1 and OP-3 raised the
prices of their brands to ₹78/- on 02.04.2012 and 03.04.2012 respectively. Thereafter,
however, the prices of the flagship brands of all the three OPs moved together in
Rajasthan. On 01.04.2014, OP-4 increased its price to ₹84/- with OP-3 and OP-1
following suit on 04.04.2014 and 08.04.2014 respectively. After a gap of four months,
OP-3 took the lead to hike its price of H5k to ₹90/- on 26.08.2014, and OP-1 and OP-4
also raised their prices to identical level on 28.08.2014 and 01.09.2014 respectively.
Then, after a gap of almost a year and a half, on 01.04.2016, both OP-4 and OP-1
increased the MRPs of their strong Beer flagship brands to ₹94/-. Following this, OP-3
also hiked its MRP of H5k to ₹94/- to bring its prices at par with that of OP-1 and OP-4.
In the year 2017, again OP-1 and OP-4 together increased the rates of KFS and TBS on
01.04.2017. Though the price of H5k was also raised its price to ₹97/- in the year 2017,
actual date of such revision has not been provided by OP-3. In the next year, OP-1 raised
the MRP of KFS to ₹100/- on 22.06.2018, with OP-4 following to the same level the
Suo Motu Case No. 06 of 2017 154
very next day. OP-3 also increased MRP of its H5k in the year 2018 to ₹100/-, but again
the actual date of such increase is not available.
123.The graphical representation of such price revisions effected by OP-1, OP-3 and OP-4 in
the State of Rajasthan, as extracted at point (xiv) above, clearly shows that the MRPs of
KFS, H5k and TBS 650ml bottle in the State of Rajasthan moved parallelly. Especially
after July 2014, the price lines of KFS and TBS overlap, with that of H5k also merging
with them immediately thereafter.
124.OP-1 and OP-4, in this regard, have contended that price increase by the OPs in the State
of Rajasthan is sought only on the EBP and similar revisions in MRP are a result of
increase in taxes/levies/excise duties which are applicable uniformly across all brands.
OP-1 has contended that the DG ought to have approached the State Corporation to
record if the OPs had submitted similar requests for a price increase in EBP. Further, OP-
1 and OP-4 have submitted that in Rajasthan, no price increase had been granted since
2014. While the Beer manufacturers were promised a price increase in 2015, the same
did not materialise. In fact, the State Government of Rajasthan did not offer a price
increase till July 2019. As such, all increases in MRP have been a result of increment in
taxes/duties etc.
125.In this regard, the Commission notes that the taxes/excise duties etc. being levied on
Beer in the State of Rajasthan would be the same for all the OPs. As such, if they have
identical/similar MRPs at any given point of time, by reverse calculation, their EBPs on
the basis of which respective MRPs are determined by the State government, would also
identical/similar only at the time.
126.Apart from the above, from the e-mail communications exchanged between the OPs in
October 2016 extracted at point (xvii) above, the Commission notes that the
representatives of the Beer companies preferred OP-5 to approach the State Governments
on behalf of its members, as it would have put more pressure on the Government.
However, Mr. Sovan Roy of OP-5 voiced his concern and suggested that "we should
avoid getting caught". This issue was discussed in OP-5's Board meeting held on
24.01.2017. The agenda of the said meeting held at Le Meridian Hotel in Bengaluru,
listed "Rajasthan rate increase ... Risk of CCI violations" as one of the issues to be taken
Suo Motu Case No. 06 of 2017 155
up for discussion by the Board. The minutes of the said meeting dated 24.01.2017 record
the following:
Such minutes, when read with the replies given by Mr. Sovan Roy of OP-5 upon the
same during recording of his depositions on oath before the DG as extracted at point (xx)
above, evidence that the OPs were well aware that their collective approach through OP-
5 was violating the provisions of the Competition Act; however, they continued to use
the aegis of the association to petition the State Governments (including in Rajasthan) for
price revisions. This, as per the DG, shows the audacity of the OPs to openly discuss
their pricing information amongst themselves and use their association to collectively
approach the State Governments for revision of MRPs and EBPs, despite noting that
"because of Competition Commission of India, AIBA to avoid rate increase matters
collectively."
127.OP-1 and OP-4 have argued that in analysis of the communications between the OPs, the
DG has disregarded the role of the State Corporation in facilitating such communication.
Against this background where the State almost never provides any price increase, the
OPs were left with no option but to make joint representations to the State Corporation
through OP-5 to, at the very least, recover their costs and not incur significant losses.
128.In this regard, the Commission observes that though the OPs have tried to justify their
cartel conduct by blaming the State government, they have not been able to explain as to
how is the State government responsible for their co-ordinated action. It seems that only
to have a strengthened bargaining power against the State, the OPs came hand-in-gloves
with each other and shared their commercially sensitive information such as cost data
etc. with each other. As such, in the view of the Commission, the State cannot be held
responsible for OPs' co-ordinated conduct.
Suo Motu Case No. 06 of 2017 156
129.Further, with respect to OP-5, it is observed that OP-5, being an association of Beer
companies, should have limited its role to raising common issues affecting the industry
and its members before the State government. However, it went beyond and indulged in
proposing strategies for raising Excise Duties by the government and also suggested the
likely future MRP, which may be fixed by the OPs. Further, the e-mails exchanged
extracted above also make it evident that OP-5 was aware of the anti-competitive nature
of the information exchange being made. As such, it is clear that the platform of OP-5
was used by the members for indulging into anti-competitive information exchange, and
OP-5 has no explanation for the same. The impugned conduct of the OPs including of
OP-5, if examined in the backdrop of permissible boundaries of legitimate conduct of
trade associations, appear to ex facie transgress the perimeter within which trade
associations can legitimately espouse the cause of their respective members.
130.Further, the OP-1 and OP-4 have argued that the price increase in EBPs sought by the
OPs were not actually awarded by the State Corporation in Rajasthan, thereby leading to
no AAEC. In the view of the Commission, under Section 3(1) of the Act, any agreement
which 'causes' or is even 'likely to cause' AAEC within India, is anti-competitive in
nature and hence, prohibited. Further, price parallelism amongst the OPs is categorically
established; hence, the plea of non-implementation holds no merit.
131.Thus, in the opinion of the Commission, identical pricing, coupled with evidences of
multiple communications amongst the OPs, and admission by representatives of OP-1
and OP-3 to have shared their price revision petitions and justification letters amongst
OP-1, OP-3 and OP-4, clearly establishes that in the State of Rajasthan, the OPs, with
active assistance of OP-5, had indulged into cartelisation which stifled/was likely to stifle
competition amongst them and may cause AAEC, from 2011 to 2018 (with OP-4 joining
in 2014), by fixing of prices of their product, which is in contravention of the provisions
of Section 3(3)(a) read with Section 3(1) of the Act. The OPs have not rebutted such
AAEC in terms of the factors stated under Section 19(3) of the Act.
Suo Motu Case No. 06 of 2017 157
West Bengal
132. In the State of West Bengal where Corporation Model prevailed till November 2017 and
from December 2017 Free Market Model was followed, the DG has relied upon the
following evidences, to give a finding of price co-ordination amongst the OPs:
(i) Internal e-mail communications exchanged in April-May 2012 between Mr. Anil
Bahl, Mr. Subodh Marwan, Mr. Soren Lauridsen, Mr. Michael Jensen and Ms.
Sukanta Banerjee of OP-4, which were submitted by OP-4 during investigation:
E-mail 1
Suo Motu Case No. 06 of 2017 158
E-mail 2
Suo Motu Case No. 06 of 2017 159
E-mail 3
E-mail 4
E-mail 5
(ii) Statement of Mr. Michael Jensen of OP-4 regarding the e-mail trail of April-May
2012:
"This was early 2012, and I was marked and interacting in the email
which pertained to West Bengal market. However, I had been in the
country and was with the company for only about 2 months at that time in
a capacity as a consultant, and this had been an oversight on my part ..."
Suo Motu Case No. 06 of 2017 160
(iii) Comparative MRPs of strong Beer SKUs of OP-1 and OP-4 in the State of West
Bengal, as tabulated by the DG from the replies of OP-1 and OP-4:
(iv) E-mail communications exchanged in January 2015 between Mr. Nitin Sharma of
OP-3 and Mr. Anil Bahl of OP-4 and thereafter internally between Mr. Anil Bahl,
Ms. Sukanta Banerjee, Mr. Biswamoy Bose, Mr. Gautam Mukhopadhyay and
Mr. Avijit Mitra of OP-4, which were submitted by OP-4 before the DG:
E-mail 1
Suo Motu Case No. 06 of 2017 161
E-mail 2
E-mail 3
Suo Motu Case No. 06 of 2017 162
(v) E-mail communications dated 11.01.2018 exchanged between Mr. Kiran Kumar
of OP-1, Mr. Raviraj Gupta of OP-4 and Mr. Sovan Roy of OP-5, which were
submitted by OP-1 before the DG:
E-mail 1
Suo Motu Case No. 06 of 2017 163
E-mail 2
E-mail 3
Suo Motu Case No. 06 of 2017 164
E-mail 4
E-mail 5
(vi) When Mr. Sovan Roy, Director General of OP-5, was asked to offer his
comments on him forwarding the 'approved' price cards to the Excise
Commissioner, West Bengal, he replied that:
"On 10.01.2018, the Govt. of West Bengal issued a circular in isolation,
raising the Excise duty on Beer from Rs. 753.72 per case currently to Rs.
1836.72 per case. The details of the changes in the MRP because of the
single change was forwarded by Mr. Raviraj Gupta to me. The impact of
this in the current MRP of Rs. 110 would go up to Rs. 211.11 because of
this one change. The MRPs are on the West Bengal Corporation's website.
On account of this, since United Breweries is the other player in West
Bengal, a confirmation was taken on this topic and accordingly the
representation dated 11.01.2018 was submitted to the Excise
Commissioner....".
Suo Motu Case No. 06 of 2017 165
(vii) Statement of Mr. Shekhar Ramamurthy of OP-1 on e-mails dated 11.01.2018:
"The Government of West Bengal, in January 2018 notified a very steep
increase in Excise duty on Beer. The consumer price of Beer would have
gone from around Rs. 110 to Rs. 210. We represented to the State Excise,
also to the Chief Minister, the Finance Minister of the State to moderate
this increase, so as to not kill the Beer industry. The cost cards that you
are seeing in this mail are recommendations to the Government on lower
duties than proposed to moderate the price increase and with a healthy
duty increase for the Government. We see this as a policy matter and not a
price fixation matter. The final resolution was such that our basic prices
remained the same or came down a little bit. The Government duties went
up steeply and consumer prices went from Rs. 110 to Rs. 145. In fact, our
petitions to the Government were to argue for the benefit of the
consumer."
(viii) Internal e-mail dated 19.01.2018 sent by Mr. Nilesh Patel to Mr. Mahesh
Kanchan, Mr. Dhiraj Kapur and Mr. Naveen Begwani of OP-4, which was
submitted by OP-4 during investigation:
Suo Motu Case No. 06 of 2017 166
(ix) Internal e-mail communications dated 15.02.2018 exchanged between Mr. Nilesh
Patel, Mr. Pawan Jagetia, Mr. Mahesh Kanchan, Mr. Anil Bahl, Mr. Naveen
Begwani and Mr. Sudip Gupta of OP-4, which was submitted by OP-4 during
investigation and partially recovered during search and seizure operation from the
premises of OP-4:
E-mail 1
E-mail 2
E-mail 3
Suo Motu Case No. 06 of 2017 167
(x) WhatsApp communication dated 19.01.2018 between Mr. Shekhar Ramamurthy
and Mr. Kiran Kumar of OP-1:
(xi) When Mr. Shekhar Ramamurthy of OP-1 was confronted regarding the identity of
'Mr. Pawan' in the WhatsApp message sent by him to Mr. Kiran Kumar of OP-1
on 19.01.2018, he stated that:
"It refers to Mr. Pawan Jagetia from Carlsberg. This refers to the earlier
point that I have made on steep duty increase in West Bengal in January,
2018. I have already given my observations earlier that we had
recommended to the West Bengal Excise for a lower increase in duty, and
Carlsberg was also agreeable to the recommendation on duty."
(xii) When Mr. Pawan Jagetia of OP-4 was confronted with the WhatsApp
communication dated 19.01.2018 during his statement, he stated that:
"There was a significant tax increase in West Bengal and we were trying
to clarify the new price card and the impact on MRP. In our process, until
the new price card has been submitted and approved, CIPL cannot even
produce. Given the confusion in the new tax structure in West Bengal, our
production was stopped, and therefore I reached out to Mr. Shekhar
Suo Motu Case No. 06 of 2017 168
Ramamurthy to understand their view on the new tax policy, and the
impact on final consumer prices. CIPL calculation of price card following
the new tax structure was showing doubling of MRP. So we were trying to
clarify with the State Excise as well as with competitors if they had the
same understanding of tax/price increase. My discussion with Mr. Shekhar
was to understand the impact of tax increase without sharing of our
cost/price cards. I conveyed to him that as per our calculations, the MRPs
would simply double on account of the tax changes, and he agreed with my
views."
(xiii) Statement of Mr. Kiran Kumar of OP-1 regarding the WhatsApp communication
dated 19.01.2018:
"In Rajasthan it was through AIBA and in Delhi I had spoken to Mr.
Mahesh Kanchan of Carlsberg India Ltd. The discussions were typically
held either through conference calls or through phone calls. For West
Bengal during last year I had discussions with Carlsberg (Mahesh
Kanchan) wherein price restructuring was discussed which included
sharing of calculations of basic price to MRP."
Mr. Kiran Kumar was asked to comment on the e-mail communications dated
15.02.2018, to which he replied that:
"..., the West Bengal Excise Duty increase notification which was released
around the time period of the mails was complex, and was open to varying
interpretations. Since the Excise Commissioner of West Bengal wanted to
meet AIBA as an industry body to discuss the impact of the said duty
increase, it was necessary to gain a common understanding of the price
build-up, post the duty increase. To the best of my knowledge, the emails
represent an effort to ensure that the two main companies in West Bengal
- UBL and Carlsberg - have a common understanding of the impact prior
to meeting the Excise Commissioner. Subsequent to the meeting, the Excise
Commissioner issued fresh notifications reducing the intended increase in
Excise Duty as well as revising downwards the retail margin, resulting in
an MRP increase from Rs. 110 to Rs. 145 per bottle. It is pertinent to add
here that the industry of Beer in West Bengal has declined almost 50% as
a result of the increase in MRP from Rs. 110 to Rs. 145."
133.From the e-mail communications exchanged in April-May 2012 between individuals of
OP-4 extracted at point (i) above, it is noted that in the State of West Bengal in 2012,
OP-1 and OP-4 were co-ordinating their prices of Beer through conference calls and e-
mails. Though Mr. Michael Jensen, in his statement extracted at point (ii) above
Suo Motu Case No. 06 of 2017 169
regarding the said e-mails gave a very evasive reply, it is noted that Mr. Michael Jensen,
in answer to another question, admitted that "there had been cases where part of the
management had been exchanging price information with competitors, for example in
2012 and 2015 in West Bengal. ... Mr. Anil Bahl would be one such person who would
himself contact or approve such contacts with the competitors." Further, OP-4, in its
submission before the DG, had also stated that "CIPL and UB, and potentially UB and
SAB would discuss among themselves to confirm the proposed price increases. These
discussions would take place over the phone and sometimes in person between Mr. Anil
Bahl and Mr. Kiran Kumar. Initially, Mr. Anil Bahl did not have a direct contact with
SAB for West Bengal ... coordination with SAB was done by UB. Later on, in 2015, Mr.
Anil Bahl also had contact with Mr. Shalabh Seth from SAB".
134.Further, from the comparative table of prices extracted at point (iii) above, it is noted that
the prices of both TBS and Kalyani Black Label Strong 650ml bottles were revised by
OP-4 and OP-1 respectively, in consonance with the 'understanding' between them,
within a few days of each other in 2012. Though OP-1 also increased the MRP of its
KFS 650ml bottle to ₹73, it was as per 'earlier plan' as indicated by Mr. Anil Bahl in his
e-mail dated 02.05.2012. This makes it clear that the two OPs had exchanged their
prospective price revision plans with each other, and thereafter increased prices
accordingly.
135.Also, the e-mails exchanged in January 2015 extracted at point (iv) above indicate that
subsequent to talks between Mr. Anil Bahl of OP-4 and Mr. Nilojit Guha of OP-3, Mr.
Nitin Sharma of OP-3 forwarded the proposed prices of OP-3 in the State of West
Bengal to Mr. Anil Bahl of OP-4. On receipt of the same, Mr. Anil Bahl asked his
subordinates to plan OP-4's price increase also in line with the file received from OP-3.
Accordingly, OP-4's employees in West Bengal worked out their calculations, and
planned to go for price hike for their SKUs, as OP-1 and OP-3 had also planned hike in
their brands.
136.Furthermore, from the e-mails dated 11.01.2018, 19.01.2018 and 15.02.2018 extracted at
points (v), (viii) and (ix) above, and the WhatsApp communication dated 19.01.2018
extracted at point (x) above, it is noted that OP-5 was facilitating the co-ordination
Suo Motu Case No. 06 of 2017 170
between OP-1 and OP-4 in the State of West Bengal for seeking MRP price increase
from the Government.
137.Such co-ordination has also been admitted by the representatives of the OPs in their
statements on oath recorded before the DG.
138.From the prices submitted by OP-1 before the DG, it is observed that the MRPs of both
KFS Premium Beer 650ml Bottle and Kingfisher Premium Lager Beer 650ml increased
in the State of West Bengal from ₹110 (earlier revised on 01.07.2017) to ₹145 and ₹140
respectively, on 16.03.2018. Similarly, from the prices submitted by OP-4 to the DG, it is
seen that the MRP of its TBS 650ml bottle was revised in the State of West Bengal from
₹110 to ₹145 on the same day, i.e., 16.03.2018.
139.Thus, sharing of and getting confirmation of one company's pricing figures with/from its
competing company, and actual reflection of such co-ordination in the price revisions
made subsequently, shows close co-ordination between OP-1 and OP-4 while
approaching the State Government for seeking price increase. Such conduct of OP-1 and
OP-4 through OP-5, from 2012 to 2018, is presumed to cause an AAEC within Indian
market, which AAEC, the OPs have been unable to rebut in terms of the factors stated
under Section 19 (3) of the Act. As such, the Commission finds such conduct of OP-1,
OP-4 and OP-5, to be in contravention of the provisions of Section 3(3)(a) read with
Section 3(1) of the Act.
140.Though OP-4 has argued that post November 2017 when the State of West Bengal
became a Free Market state, there was no price co-ordination amongst the OPs and
sharing of cost cards by it is not price sensitive information aimed at co-ordinating price
increase, the Commission does not find such argument of OP-4 to be tenable. Cost cards
is commercially sensitive information.
141.Further, from the e-mails dated 15.02.2018 extracted at point (ix) above, it is noted that
Mr. Shekhar Ramamurthy of OP-1 also had discussions with Mr. Pawan Jagetia of OP-4
about the repercussions of the new West Bengal Liquor Policy on their respective
companies' Beer prices. In his internal e-mail dated 15.02.2018 sent to Mr. Nilesh Patel,
Mr. Pawan Jagetia confirmed that he was in constant touch with OP-1 and also suggested
Suo Motu Case No. 06 of 2017 171
registering their Carlsberg Elephant SKU with the Excise Authorities only if OP-1
registered their own Kingfisher Ultra. This makes it apparent that the two OPs (OP-1 and
OP-4) even co-ordinated registration and supply of their Beer brands in the State of West
Bengal. As stated by Mr. Jagetia in his e-mail dated 15.02.2018, OP-4's moving first
with registration of their brand would significantly weaken their case as well as
industry's position. Therefore, it is clear that the decision of OP-4 to register its brand in
the State of West Bengal was not an independent business decision, but was taken in
consultation with OP-1. This had the effect of restricting supply of Beer in the State as
well.
142.From the internal e-mail dated 19.01.2018 exchanged between officials of OP-4,
extracted at point (viii) above, it also appears that OP-1 and OP-4 had joined hands for a
while in stopping the supply of Beer in the State of West Bengal. In this regard, both OP-
1 and OP-4, in their respective objections/suggestions to the DG Report, have
acknowledged the disruption of supply of Beer in the State of West Bengal in January-
March 2018. However, they have contended that such disruption was prompted due to
steep increase in excise duty resulting in Beer becoming unaffordable to the consumers.
The supply was resumed immediately after excise duty was reduced to acceptable levels.
The Commission is of the view that stoppage of supply in 2018 by OP-1 and OP-4,
through OP-5, even if to protest against increase in Excise Duty by the State government,
amounted to limiting the supply of beer in the State of West of West Bengal. Under the
provisions of Section 3(3) of the Act, such limiting of supply is presumed to have an
AAEC in the market, which effect the OPs have been unable to rebut in the present case
in terms of the factors stated under Section 19(3) of the Act. Therefore, the Commission
finds stoppage of supplies by OP-1 and OP-4, to amounting to contravention of the
provisions of Section 3(3)(b) read with Section 3(1) of the Act.
143.Hence, from the aforementioned evidences collected by the DG which have been
analysed by the Commission in detail, at least in the following States/UTs, cartelisation
amongst the OPs as follows, stands established:
Suo Motu Case No. 06 of 2017 172
(1) Andhra Pradesh - Price co-ordination between OP-1 and OP-3 in 2009 and 2013,
in contravention of the provisions of Section 3(3)(a) read with Section 3(1) of the
Act;
(2) Delhi - Price co-ordination between OP-1, OP-3 and OP-4 through OP-5 in 2013,
in contravention of the provisions of Section 3(3)(a) read with Section 3(1) of the
Act;
(3) Karnataka - Price-co-ordination between OP-1 and OP-3 from 2011 to 2018 with
OP-4 joining in from 2012, in contravention of the provisions of Section 3(3)(a)
read with Section 3(1) of the Act; and cartelisation between OP-1 and OP-3 with
respect to supply of Beer to premium institutions in the city of Bengaluru in 2010,
in contravention of the provisions of Section 3(3)(c) read with Section 3(1) of the
Act;
(4) Maharashtra - Price co-ordination between OP-1 and OP-3 from 2011 to 2018
with OP-4 joining in from 2012, in contravention of the provisions of Section
3(3)(a) read with Section 3(1) of the Act; cartelisation between OP-1 and OP-4 to
restrict/limit the supply of Beer in 2017, in contravention of the provisions of
Section 3(3)(b) read with Section 3(1) of the Act; and sharing of market between
OP-1, OP-3 and OP-4 from 2013 to 2017, in contravention of the provisions of
Section 3(3)(c) read with Section 3(1) of the Act;
(5) Odisha - Price co-ordination between OP-1 and OP-3 in 2009 and 2010, in
contravention of the provisions of Section 3(3)(a) read with Section 3(1) of the
Act; price co-ordination by OP-4 in 2015 and 2016, in contravention of the
provisions of Section 3(3)(a) read with Section 3(1) of the Act; and cartelisation
between OP-1, OP-3 and OP-4, through OP-5, to restrict/limit the supply of Beer
in 2015-16, in contravention of the provisions of Section 3(3)(b) read with
Section 3(1) of the Act;
(6) Puducherry - Price co-ordination between OP-1, OP-3 and OP-4 in 2017, in
contravention of the provisions of Section 3(3)(a) read with Section 3(1) of the
Act;
Suo Motu Case No. 06 of 2017 173
(7) Rajasthan - Price co-ordination between OP-1, OP-3 and OP-4 through OP-5
from 2011 to 2018 with OP-4 joining in from 2014, in contravention of the
provisions of Section 3(3)(a) read with Section 3(1) of the Act; and
(8) West Bengal - Price co-ordination between OP-1 and OP-4 through OP-5, from
2012 to 2018, in contravention of the provisions of Section 3(3)(a) read with
Section 3(1) of the Act; and cartelisation between OP-1 and OP-4, through OP-5,
to restrict/limit the supply of Beer in 2018, in contravention of the provisions of
Section 3(3)(b) read with Section 3(1) of the Act.
Other States
144.Apart from the above, with respect to the State of Bihar, though the DG has not given
any categorical finding regarding contravention of the provisions of the Act by the OPs,
it has found the following evidences of communication amongst the OPs:
(i) Internal e-mails dated 18.05.2011 exchanged between Mr. Kiran Kumar, Mr.
Kalyan Ganguly and Mr. Shekhar Ramamurthy of OP-1, which were recovered
during search and seizure operation from the premises of OP-1:
E-mail 1
...
Suo Motu Case No. 06 of 2017 174
E-mail 2
E-mail 3
145.From the aforesaid e-mails, all that can be deciphered is that OP-1 had restricted supply
of its Beer in the State of Bihar in 2011, which it resumed after having a meeting with
the Excise Authorities in May 2011. OP-3 also seems to have restricted its supply of
Beer in the State of Bihar in 2011; however, there is no evidence in the DG Report which
suggests that the same was done pursuant to an agreement with OP-1.
146.Regarding OP-4, the DG has noted that it had submitted that it had been primarily
interacting with OP-1 and occasionally with OP-3 to discuss pricing of Beer in
Maharashtra, West Bengal, Delhi, Karnataka, Puducherry, Odisha and Bihar. The pricing
discussions took place with a view to seek increase in Beer prices and co-ordinate
proposed actions in response to extraordinary Excise duty increase or Bottle Bar Codes
by various State Authorities. The discussions on prices were primarily focused on the
mainstream brand (i.e., Tuborg) in Free Market States such as Maharashtra, West Bengal
and Puducherry, the Hybrid State of Delhi as well as certain Corporation States such as
Odisha, Karnataka and Bihar. However, in furtherance to such submission, the DG has
not put forth any evidence in the investigation report substantiating cartel arrangement in
Suo Motu Case No. 06 of 2017 175
the State of Bihar involving OP-4. Anyhow, since April 2016, Bihar imposed complete
prohibition on all forms of alcohol.
147.As such, in the view of the Commission, no case of cartelisation amongst the OPs in the
State of Bihar is made out from the DG Report.
148.With respect to the remaining States/UTs in India, no specific finding of cartelisation has
been given by the DG against the OPs by collection of explicit evidences. It is however,
noted from the DG Report that a few instances here and there pointing out to meeting of
minds between the OPs in other states also like in the State of Madhya Pradesh and
Telangana, can be seen. In the letter dated 23.11.2016 written by OP-5 to the Secretary-
Finance and Revenue Government of Rajasthan, an attachment was enclosed depicting
EBP prices of popular Beer brands of OPs in other States:
149.As can be seen from the aforesaid, the EBP of OP-1 and OP-3 in the States of Madhya
Pradesh and Telangana, along with State of Andhra Pradesh, are identical to the last
paisa. This is despite the fact that the brewery plants of these manufacturers are situated
at different locations and as such, the manufacturing cost per unit of Beer for the OPs
having different manufacturing locations, production capacities and different efficiency
levels, would not be identical down to the last paisa.
Suo Motu Case No. 06 of 2017 176
150.Furthermore, in their respective lesser penalty applications also, the OPs had made
admissions with respect to cartelisation in certain other states also, however, no evidence
in this regard has been put forth by the DG in its investigation report.
Second-hand Bottles
151.Apart from price co-ordination and limiting/restricting supply of Beer in various
States/UTs, the DG has also reached to a finding of co-ordination amongst OP-1 and OP-
3 with respect to purchase of second-hand bottles, by relying upon the following
evidences:
(i) E-mail communications exchanged between Mr. Santosh Kumar of OP-1 and Mr.
Shalabh Seth of OP-3 in October 2009, which were submitted by OP-1 before the DG:
E-mail 1
Suo Motu Case No. 06 of 2017 177
E-mail 2
(ii) E-mail communications exchanged between Mr. Santosh Kumar, Mr. Sudesh
Ganapathy Shenoy, Mr. Cedric Vaz, Mr. Kalyan Ganguly and Mr. Shekhar
Ramamurthy of OP-1 and Mr. Shalabh Seth, Mr. Shirish Wakchaure and Mr. Paolo
Lanzarotti of OP-3 in June 2010, which were recovered during search and seizure
operation from the premises of OP-1:
Suo Motu Case No. 06 of 2017 178
E-mail 1
E-mail 2
Suo Motu Case No. 06 of 2017 179
E-mail 3
E-mail 4
Suo Motu Case No. 06 of 2017 180
E-mail 5
E-mail 6
Suo Motu Case No. 06 of 2017 181
E-mail 7
(iii) E-mail dated 24.05.2011 sent by Mr. Shirish Wakchaure of OP-3 to Mr. Santosh
Kumar and Mr. Sudesh Ganapathy Shenoy of OP-1, which was submitted by OP-1
before the DG:
Suo Motu Case No. 06 of 2017 182
(iv) E-mail communication dated 31.01.2012 sent by Mr. Shirish Wakchaure of OP-3 to
Mr. Santosh Kumar and Mr. Sudesh Ganapathy Shenoy of OP-1, which was
submitted by OP-1 before the DG:
152.From the e-mail communications of October 2009 extracted at point (i) above, it is noted
that OP-3 informed OP-1 to stay put at fixed decided prices for purchase of old bottles
and also requested that OP-1 shares its stock of bottles with OP-3 so as to "ensure we
succeed in our efforts to hold on to prices and curtail any further increase in prices." In
reply thereto, OP-3 showed apprehension about sharing of bottle stock as that may lead
to "even higher speculation and potential exponential rise in prices which will hurt the
industry harder."
153.Further, from the e-mail communications of June 2010 extracted at point (ii) above, and
e-mails dated 24.05.2011 and 31.01.2012 extracted at points (iii) and (iv) above
respectively, it is noted that OP-1 and OP-3 also discussed amongst themselves the
number of truckloads of second-hand bottles each has been purchasing for re-use in their
bottling plants. As OP-1 and OP-3 had decided upon the rate at which each would buy
such bottles from the market, on receiving information regarding OP-3 picking up more
Suo Motu Case No. 06 of 2017 183
truckloads of second-hand bottles at rates higher than those agreed upon, Mr. Santosh
Kumar of OP-1 is seen complaining about it to Mr. Shalabh Seth of OP-3.
154.In fact, in his statement on oath recorded by the DG, Mr. Shekhar Ramamurthy of OP-1
confirmed that "... The bottle collectors were holding companies to ransom by either not
making bottles available or artificially increasing their prices. So, indeed coordination
happened between UB, SAB and perhaps Carlsberg in this matter. Such coordination
existed in respect of both, volume as well as prices of the second-hand bottles." Even Mr.
Shalabh Seth of OP-3, in his statement on oath recorded by the DG, affirmed that "... On
patent bottles, my discussions were with Mr. Santosh Kumar and Mr. Sudesh Shenoy
both from UB). ..."
155.OP-1 has argued that discussions regarding second-hand bottles also did not lead to any
AAEC as the same were undertaken to: (i) avoid significant increase in retail prices for
consumers; (ii) implement optimal cost management in procurement of old bottles; and
(iii) improve efficiency in such procurement. It submitted that hoarding of old bottles by
bottle collectors and no injection of new bottles by smaller beer manufacturers in the
industry resulted in significant increase in buy-back price of old bottles for OP-1 and its
competitors, and it drove them to launch their own patent bottles in 2010. Though OP-1
and OP-3 discussed amongst themselves the prices at which they would buy-back old
Industry Bottles from collectors to safeguard themselves from increasing costs of old
bottles, the prices that the OPs agreed to for buying back their own Patent Bottles could
not be met.
156.The Commission notes that the provisions of the Act do not just pertain to the end-
consumers of goods/services. No distinction in the Act, for the purposes of assessment of
anti-competitive conduct, is made between the end-consumers, and intermediaries falling
in the supply chain. As such, the argument of OP-1, that co-ordination in the purchase of
second-hand bottles was done with OP-3 in order to benefit end-consumers, may not
grant it much defence, as such conduct, even if assumed to be beneficial to end-
consumers, would have led to harm being caused to bottle collectors, who are also one of
the functionaries/levels in the overall Beer supply chain. Anyhow, the Commission
believes that given the sheer magnitude and size of the OP companies, their
Suo Motu Case No. 06 of 2017 184
countervailing buying power over small time bottle collectors, would have been
substantial. Hence, the argument taken by OP-1 regarding their discussions being a
counter-action to the alleged hoarding action of the bottle collectors, does not seem to
hold much water.
157.Thus, from the aforesaid evidence of communications amongst OP-1 and OP-3,
cartelisation amongst them from at least 2009 to 2012 in the purchase of second-hand
bottles is clearly established. OP-1 and OP-3 had an 'understanding' to share their off-
take of old bottles from the market for re-use in their breweries. They had also agreed
upon the rate at which they would procure such bottles from the bottle collectors. They
closely monitored each other's purchase of old bottles. Such conduct of OP-1 and OP-3
may have resulted in limiting and controlling the supply of second-hand Beer bottles in
the market, amounting to contravention of the provisions of Section 3(3)(b) read with
Section 3(1) of the Act.
158.Though the DG has also found that OP-4 also formed a part of this collusion, the
Commission notes that with respect to OP-4, apart from the statement of Mr. Shekhar
Ramamurthy of OP-1 that "coordination happened between UB, SAB and perhaps
Carlsberg in this matter", there is no other evidence of involvement of OP-4 in such
collusion. As such, the Commission does not find OP-4 guilty of cartelisation with
respect to second-hand Beer bottles.
Role of All India Brewers' Association (OP-5)
159.It is noted that all the three Beer companies, i.e., OP-1, OP-3 and OP-4, were lesser
penalty applicants before the Commission. The only contesting OP was OP-5, the All
India Brewers' Association. As such, the role of OP-5 in the cartelisation amongst Beer
manufacturers has been analysed by the DG separately.
160.The DG has noted that OP-5 was formed as a registered society in 1977 under the
Karnataka Societies Registration Act, 1960, with brewers as well as co-packers as its
members. Its registration however, lapsed on account of inactivity. After its revival in
2013 with framing of a new Memorandum of Association ('MoA'), the Beer brand
owners became its prime members and the maltsters, equipment suppliers etc. became its
Suo Motu Case No. 06 of 2017 185
associate members. The concept of patron membership in OP-5 was abolished in 2016,
and as in July 2018, the association had all major (both national and local level) Beer
manufacturers as its members including OP-1, OP-3 and OP-4.
161.OP-5 is governed by a Board consisting of a chairman and members from amongst its
member companies. OP-5 appointed Mr. Sovan Roy as its Director General in its Annual
General Meeting held on 07.02.2013.
162.OP-5 is stated to have been formed for the purposes of advising its member companies
and co-ordinating with the State Excise Authorities regarding framing of Excise policies
regarding Beer and fixation and periodical revision of EBP and MRP of Beer products in
the territories of respective States/UTs. However, as can be seen from multiple e-mails
extracted above, OP-5 provided its platform to OP-1, OP-3 and OP-4 for price co-
ordination and other forms of cartelisation in various States including Delhi, Odisha,
Rajasthan and West Bengal.
163.Further, the DG has relied upon the following e-mail communications dated 10.02.2013
exchanged between the OPs, which were submitted by OP-1 before the DG, and
concluded that OP-5 as well as OP-1, OP-3 and OP-4, were well aware that their joint
representations on pricing to Government Authorities, and discussions with competitors
on restraint of trade, pricing etc., were in violation of the provisions of Competition Law.
E-mail 1
Suo Motu Case No. 06 of 2017 186
E-mail 2
E-mail 3
E-mail 4
E-mail 5
E-mail 6
Suo Motu Case No. 06 of 2017 187
E-mail 7
164.In the above e-mails, the top managerial personnel of the OPs can be seen
warning/advising each other from making discussions at the platform of OP-5. However,
as is evident from the e-mail and other communications discussed earlier, the OPs
continued to indulge in such discussions with each other, including Mr. Sovan Roy of
OP-5, while making joint representations to the State Government Authorities on pricing
issues, even after February 2013.
165.Though OP-5 has denied having any role in any anti-competitive activity, Mr. Sovan
Roy, the Director General of OP-5 had admitted before the DG that "the platform of
AIBA was used for pursuing increase of rates of the Beer industry."
166.Further, in his statement, Mr. Shekhar Ramamurthy of OP-1, former President/Chairman,
on the role of OP-5, has stated that:
"... we have used AIBA to represent to State Governments, specifically
Rajasthan and Odisha with respect to an industry grievance on pricing. ... In
Rajasthan specifically, since the Government had not given a price revision of
the basic price since 2014, there have been discussions largely over telephone
between CEOs/Presidents of CIPL, SAB Miller and UBL, and may be ABI as
well, regarding petitions to be made to the Excise department for a basic price
increase. The platform for these discussions was AIBA and the DG of AIBA was
meant to coordinate the petitions and discussions between the companies and
the State Excise department."
167.In this regard, Mr. Manish Shyam of OP-3, in his statement, has also stated that:
"I did attend the meeting in December 2015 with Mr Pravin Gupta, PSF,
Rajasthan requesting him for a price increase to which he again said that he
would follow it up with the Government. The meeting was also attended by
Suo Motu Case No. 06 of 2017 188
Carlsberg and UB. After individual companies had submitted their respective
proposals, they followed it up with the Excise Commissioner and the PSF,
Rajasthan under umbrella of AIBA, so that collectively there would be better
chances of getting a price increase. The decision to go through AIBA was taken
by the top management."
168.Mr. Shalabh Seth of OP-3, has also deposed that:
"Yes, we used to meet at least four times a year at AIBA meetings and also at
other places to discuss prospective quotes and also other industry issues like
State Excise policy etc. so that we collectively get a better bargain from the
Government."
169.Further, Ms. Ritika Verma, Senior Executive Assistant of OP-5, stated in her statement
that:
"... I generally receive emails from United Breweries, Carlsberg, AB InBev,
Molson & Coors, Devan Modern Breweries, Mohou India and other members of
AIBA. Particularly emails are received from UB & Carlsberg. These companies
occasionally send emails sharing their cost card of Beers in case there is a
requirement of increase in landed price/ex-brewery price or need for lowering
the Excise duty in a particular State. After getting the cost card, our DG seeks
appointment with respective State official to discuss the said issues. The
companies UB, Carlsberg, AB InBev also send their proposals to revise the ex-
brewery price/landed price for different States to AIBA. The prices with
proposals and cost cards are shared by AIBA with other manufacturers also,
and after agreeing on a particular price revision by members especially UB,
Carlsberg, and AB InBev, AIBA takes up the matter with respective State
Governments for revision in ex-brewery price. So far as I remember, I started
receiving/exchanging the cost card of Beer manufacturers (particularly UB,
Carlsberg and AB InBev) since 2014. All the price increase related decisions,
i.e., to increase ex-brewery price of Beer/landed price of Beer are taken with the
concurrence of AIBA members and Chairman of AIBA. The background work,
calculations, arrangement of meetings with members etc. are being done by our
DG, Sh. Sovan Roy. The discussions relating to price increase of Beer, i.e., ex-
brewery price/landed price are held over phone/mobile by Sh. Sovan Roy with
the members of AIBA and Chairman of AIBA. Emails are also sent by members
of AIBA to AIBA in relation to price increase of Beer in respective States."
170.Thus, as deposed by Mr. Shekhar Ramamurthy of OP-1, and Mr. Shalabh Seth and Mr.
Manish Shyam of OP-3, and as confirmed by Ms. Ritika Verma of OP-5 herself, the Beer
manufacturing companies used to exchange discussions amongst themselves on their
Suo Motu Case No. 06 of 2017 189
prospective quotes and the way forward with State Excise departments. The
representatives of the member companies used to meet the Excise Authorities under the
umbrella of OP-5 so that collectively there would be better chances of getting price
increase. On its part, OP-5 also proposed the rates/quantum of price revisions to be
applied for before the State Governments, as evidenced from the e-mails discussed in
detail earlier. Besides, to facilitate one-to-one discussions amongst its member
companies on various issues, including pricing, OP-5 also arranged conference calls
amongst the top managerial personnel of the companies.
171.Hence, OP-1 and OP-3 indulged into nation-wide cartelisation from 2009 to at least
10.10.2018 (till the DG conducted search and seizure operation at the premises of the
OPs), with OP-4 joining in from 2012 and with OP-5, since 2013, serving as a platform
for facilitating such cartelisation, which is in contravention of the provisions of Section
3(3)(a), 3(3)(b) and 3(3)(c) read with Section 3(1) of the Act. Though OP-1 and OP-4
have raised several arguments against the analysis and findings of the DG, all three
cartelising companies, i.e., OP-1, OP-3 and OP-4, by filing lesser penalty applications
before the Commission, have in a way, acknowledged and accepted their guilty anti-
competitive conduct.
172.The major argument which has been raised by OP-1 and OP-4 is that such co-ordinated
conduct amongst the OPs was necessary because of the highly regulated nature of the
Beer industry and the high-handedness of the State Authorities. The Commission notes
that such plea taken by the OPs cannot exempt them from the consequences of their
deliberate unlawful conduct. However, the same may be considered as a mitigating factor
in their favour.
Liability under Section 48:
173.Now that contravention of the provisions of the Act by the OPs has been established, the
Commission proceeds to determine in the subsequent paragraphs, role and liability of the
respective individuals of the OPs, in terms of Section 48 of the Act.
Suo Motu Case No. 06 of 2017 190
174.The DG has found 5 individuals of OP-1, 6 individuals of OP-3, 7 individuals of OP-4
and 1 individual of OP-5 liable in terms of Section 48 of the Act, for the anti-competitive
conduct of their respective company. The role and liability of each of them is discussed
as follows:
United Breweries Limited
175.The first individual of OP-1 found liable by the DG under Section 48(1) of the Act is Mr.
Kalyan Ganguly, Former Managing Director of OP-1 from 2009 till July 2015. Being the
Managing Director during the period of contravention by OP-1, Mr. Kalyan Ganguly was
in-charge of, and was responsible to OP-1 for the conduct of its business. Further, he was
in receipt of a few e-mails dated 02.06.2010 extracted above with respect to cartelisation
in the purchase of second-hand bottles by OP-1. As such, being in-charge of and
responsible to OP-1 for the conduct of its business during the relevant period of
contravention by OP-1, Mr. Kalyan Ganguly has been found liable by the DG for the
conduct of OP-1 in terms of Section 48(1) of the Act.
176.Before the Commission, Mr. Ganguly has submitted that being the Managing Director,
he was not involved in day-to-day operations of OP-1 and was involved only in relation
to key and strategic discussions and decisions in relation to the operations and
management of OP-1. However, he has not been able to prove that contravention by OP-
1 was committed without his knowledge or that he had exercised all due diligence to
prevent the commission of such contravention by OP-1.
177.Further, Mr. Ganguly has submitted before the Commission that he was not given an
opportunity by the DG to present his case before giving a finding of contravention
against him; as such principles of natural justice have been violated against him. In this
regard, the Commission notes that as full opportunity to respond to the DG Report has
been afforded to Mr. Kalyan Ganguly by the Commission, no principles of natural justice
against him have been violated.
178.Being in-charge of and responsible to OP-1 for the conduct of its business from 2009 to
2015, the Commission holds Mr. Kalyan Ganguly liable for the anti-competitive conduct
of OP-1 in terms of Section 48(1) of the Act.
Suo Motu Case No. 06 of 2017 191
179.The next individual of OP-1 found liable by the DG under Section 48(1) of the Act is Mr.
Shekhar Ramamurthy, Managing Director of OP-1 since 01.08.2015, former Joint
President of OP-1 from September 2012 till July 2015 and former Deputy President of
OP-1 from October 2007 till August 2012.
180.Mr. Shekhar Ramamurthy has been the sender and recipient of several e-mail
communications exchanged between the competitors including e-mails dated 02.06.2010,
10.02.2013, 29.07.2013, 02.08.2013, 07.08.2013, 06.03.2015, 31.03.2015, 09.04.2015,
17.04.2015, 22.04.2015 and 28.04.2015 extracted above, in which discussions with
respect to co-ordination in the States of Delhi and Odisha and with respect to purchase of
second-hand bottles took place, besides being CC'd in several other e-mails. Further, Mr.
Ramamurthy also had a WhatsApp chat dated 19.01.2018 with Mr. Kiran Kumar of OP-1
in respect of MRP increase being sought in the State of West Bengal. All these evidences
have been used by the DG to reach a finding of cartelisation against OP-1. Also, in its
lesser penalty application, OP-1 has named Mr. Shekhar Ramamurthy as one of the
individuals involved on its behalf in cartelisation conduct.
181.In fact, in his deposition on oath before the DG, Mr. Shekhar Ramamurthy has himself
admitted as follows:
"... the alcohol industry is very tightly controlled by respective State
governments making the business an imperfect market. In this context, to
mitigate the pain for the industry, we have indeed coordinated and discussed
with our competitors on basic prices that we could get from respective State
governments....... it is also a fact that we have discussed prices in States of
Karnataka, Maharashtra..."
182.Further, Mr. Ramamurthy has admitted to have had personal interactions with Mr. Paolo
Lanzarotti and Mr. Shalabh Seth of OP-3, as well as with Mr. Michael Jensen and Mr.
Pawan Jagetia of OP-4 on pricing issues. He has admitted to have communicated with
the top managerial personnel of the competitor companies through telephone calls, e-
mails and text messages. In their statements recorded during the course of investigation,
Mr. Michael Norgaard Jensen and Mr. Shalabh Seth of OP-4, have also admitted to have
had anti-competitive contacts with Mr. Shekhar Ramamurthy.
Suo Motu Case No. 06 of 2017 192
183.Though Mr. Ramamurthy has submitted that being the Managing Director, he was not
involved in day-to-day operations of OP-1 and there is no reason for him to be aware of
the alleged conduct as his role involved only key and strategic discussions and decisions
in relation to operations and management of OP-1, the Commission observes that before
becoming the Managing Director of OP-1 in 2015, he held other positions in OP-1 and at
that time, he was a part of several e-mail communications (sender and/or recipient) and
other competitor contacts, in respect of cartelisation by OP-1. Further, even as Managing
Director of OP-1, he has not been able to prove that contravention by OP-1 was
committed without his knowledge or that he had exercised all due diligence to prevent
the commission of such contravention by OP-1.
184.As such, being a clear part of and being aware of the anti-competitive activities of OP-1,
Mr. Shekhar Ramamurthy is liable for the conduct of OP-1 in terms of Section 48(1) as
well as 48 (2) of the Act.
185.The third individual found liable by the DG under Section 48(2) of the Act is Mr. Steven
Bosch, former ED and CFO of OP-1 from 01.09.2016 to 01.01.2019. The DG has noted
that during the search and seizure operation, certain e-mails exchanged between key
personnel of OP-1 and their counterparts in competing companies, were recovered from
the cabin of Mr. Steven Bosch. Further, one WhatsApp communication of November
2017 with Mr. Ben Abi of AB InBev, was recovered from his iPhone, contents of which
are as below:
Suo Motu Case No. 06 of 2017 193
186.The DG has observed that such WhatsApp communication indicates that in November,
2017, Mr. Steven Bosch made an attempt to get Mr. Ben Verhaert, Managing Director of
AB InBev, to co-ordinate with him on 'industry related matter', but was rebuffed by Mr.
Ben Verhaert. The DG observed that though there is no e-mail communication to-and-fro
Mr. Steven Bosch, nonetheless, being a whole-time Director and CFO of OP-1 involved
in handling day-to-day affairs of the company, Mr. Steven Bosch is responsible for anti-
competitive activities of the company in terms of Section 48(2) of the Act.
187.In this regard, Mr. Steven Bosch has submitted that the DG has erroneously relied on the
factors relevant under Section 48(1) of the Act to recommend individual liability against
him under Section 48(2) of the Act. There is no evidence on record which even faintly
establishes de facto or active involvement of Mr. Steven Bosch in the alleged anti-
competitive activities of OP-1. The DG has not been able to prove any consent, or
connivance, or neglect on part of Mr. Steven Bosch to recommend individual liability
under Section 48(2) of the Act. Rather, instead of proving consent or connivance or
neglect on part of Mr. Steven Bosch, the DG has wrongly relied on the "in-charge of and
Suo Motu Case No. 06 of 2017 194
responsible to" test under Section 48(1) of the Act to hold Mr. Bosch liable. Further, Mr.
Bosch has submitted that there is also no evidence on record to justify recommendation
of individual liability against Mr. Steven Bosch under Section 48(1) of the Act. In his
capacity as the CFO and ED, Mr. Steven Bosch had the responsibility of the financial
performance of OP-1; his primary responsibility being to manage the profit and loss
account and monitor the performance of OP-1 against the agreed budget. As such, Mr.
Steven Bosch only had broad and high-level knowledge of pricing, pricing strategy, sales
data and targets, as well as volume data. The role and profile of Mr. Steven Bosch did
not entail any contact with OP-1's competitors or decision making in relation to OP-1's
sales or prices.
188.Mr. Steven Bosch has submitted that it was only in June 2018 that for the first time, he
was made aware that there might be certain competitor contact between certain
employees of OP-1 with third parties (which could have included OP-1's competitors),
which could potentially be considered as anti-competitive under the Act. From June 2018
until the Dawn Raid, Mr. Steven Bosch exercised all due diligence and took all possible
steps to make OP-1 competition compliant. It was due to the reason of internal audit that
was going on during that period that a "few e-mails" were seized by the DG during Dawn
Raid from Mr. Bosch's cabin. These e-mails relate to other persons and were dated
before Mr. Steven Bosch joined in at OP-1.
189.Regarding the WhatsApp exchange of November 2017 with Mr. Ben Verhaert of AB
InBev, Mr. Bosch has submitted that the same has been misconstrued by the DG. The
industry matter referred to in the said communication was around issues regarding the
applicability of GST on contract production units. There was no other intended
motive/intention to discuss any other topic with Mr. Ben Verhaert. Further, no actual
meeting ever took place between Mr. Steven Bosch and Mr. Ben Verhaert in furtherance
of such communication, as such there could also have been no AAEC anyhow. Yet, the
DG has misconstrued the above WhatsApp exchange as being an attempt on part of Mr.
Steven Bosch to "coordinate with him on an industry related matter" and "an attempt to
have contacts with Mr. Ben Verhaert". The DG could have sought clarification from Mr.
Ben Verhaert to explain the context of the concerned WhatsApp message; however, it
failed to do so.
Suo Motu Case No. 06 of 2017 195
190.At the outset, the Commission notes that Mr. Steven Bosch is a lesser penalty applicant
before the Commission. In his lesser penalty application, Mr. Bosch has clearly stated
that he became aware of the anti-competitive activities of OP-1 only in June 2018
pursuant to which, he promptly brought the possible violation to the notice of Heineken,
the major shareholder in OP-1, and internal audit by externals counsels was started in
OP-1. Mr. Bosch has demonstrated through WhatsApp communications and e-mail
exchanges annexed to his lesser penalty application that though internal resistance from
certain officers of OP-1 was being faced, he ensured that such competitor contacts of
OP-1 were tabled at OP-1's Board Meetings. Further, Mr. Bosch has also annexed
multiple WhatsApp communications to his lesser penalty application including a
WhatsApp communication dated 18.06.2018 sent to Mr. Ernst Vd Weert - Heineken,
Legal Head, which shows that he was discussing filing for leniency with the CCI.
191.Noting the above facts, the Commission is of the view that the same explains the DG
recovering certain incriminating e-mails from the cabin of Mr. Steven Bosch during the
search and seizure operations at OP-1 in which e-mails, is it noted that Mr. Steven Bosch
was neither a sender nor recipient nor CC'd in any of such e-mails.
192.There is also no other evidence available on record of Mr. Steven Bosch having any
competitor contacts like e-mail communications/messages/phone calls/attending OP-5
meetings, which may incriminate Mr. Bosch in the anti-competitive activities of OP-1.
The sole contact found by the DG is the WhatsApp communication dated 09.11.2017
which simply shows that Mr. Bosch wanted to discuss an 'industry-related' matter with
Mr. Ben Abi of AB InBev. Mr. Bosch has explained that such 'industry-related' matter
pertained to GST and it can be seen from the WhatsApp communication that Mr. Ben
Abi had stated that such matter may be discussed in a more formal meeting to which Mr.
Bosch agreed. There is no evidence on record which may show that the industry-related
matter had to be some sort of anti-competitive discussion.
193.As such, in the opinion of the Commission, without there being any evidence of active
involvement of Mr. Steven Bosch in the anti-competitive activities of OP-1, he cannot be
held liable in terms of Section 48(2) of the Act for the anti-competitive activities of OP-
1.
Suo Motu Case No. 06 of 2017 196
194.As far as his liability under Section 48(1) of the Act is concerned, Mr. Steven Bosch was
the ED and CFO of OP-1. He has submitted that had the responsibility of the financial
performance of OP-1; his primary responsibility being to manage the profit and loss
account and monitor the performance of OP-1 against the agreed budget. As such, he had
only broad and high-level knowledge of pricing, pricing strategy, sales data and targets,
as well as volume data. His role and profile did not entail any contact with OP-1's
competitors or decision making in relation to OP-1's sales or prices. Further, Mr. Bosch
has clearly stated in his lesser penalty application that till June 2018, he had no
knowledge of OP-1 indulging into any anti-competitive activity.
195.In the opinion of the Commission, given the role and profile of Mr. Steven Bosch in OP-
1, he cannot be said to be 'in-charge of' or 'responsible to' OP-1, for the conduct of its
business. Further, Mr. Bosch's submission that he had no knowledge of anti-competitive
activities of OP-1 till June 2018 seems plausible as after June 2018, it can be seen that
Mr. Bosch did initiate external audit in OP-1 and brought the alleged violations by OP-1
to the notice of people at Heineken.
196.Therefore, in the opinion of the Commission, Mr. Steven Bosch also cannot be held to be
liable in terms of Section 48(1) of the Act for the anti-competitive activities of OP-1.
197.The fourth individual found liable by the DG under Section 48(2) of the Act is Mr. Kiran
Kumar, Chief Sales Officer of OP-1 since 28.08.2017, former Executive Vice President
Sales of OP-1 from July 2014 till June 2017 and former Senior Vice President Sales from
July 2009 till June 2014.
198.At the outset, it is noted that Mr. Kiran Kumar has submitted before the Commission that
an officer of a company can only be liable in terms of Section 48(2) of the Act once the
company is found to be in contravention of the provisions of Act. In this regard, since the
Commission has already found OP-1 to be in contravention of the provisions of the Act
above, the role and liability of its individuals in terms of Section 48 of the Act can now
be examined.
Suo Motu Case No. 06 of 2017 197
199.The DG has found that Mr. Kiran Kumar was directly reporting to the Managing
Director of OP-1, and that he is the one responsible for the sales volume, revenue and
market share of the company.
200.The Commission notes that Mr. Kiran Kumar was the sender and recipient of multiple e-
mails including e-mails dated 09.06.2009, 15.09.2009, 08.03.2010, 07.09.2011,
12.09.2011, 25.01.2011, 22.12.2011, 15.11.2013, 28.04.2015, 30.04.2015, 28.10.2016
and 11.01.2018 extracted above with respect to cartelisation in the States/UTs of Andhra,
Karnataka, Maharashtra, Odisha, Puducherry, Rajasthan and West Bengal. Further, he
exchanged WhatsApp messages with Mr. Shalabh Seth of OP-3 in 2013 and with Mr.
Shekhar Ramamurthy of OP-1 on 19.01.2018, which have also been extracted above and
used to establish cartelisation against OP-1. His message exchanges with Mr. Deepak
Malhotra of OP-3 and Mr. Anil Bahl of OP-4 have also been extracted above and used
for the purpose of establishing cartelisation in the UT of Puducherry.
201.In his deposition on oath before the DG, Mr. Kiran Kumar made the following
admissions:
"Yes, on certain occasions we discuss prices with our competitors. For instance,
in Rajasthan in order to pursue price increase, we shared and discussed price
data under the umbrella of All India Brewers Association (AIBA). ......we tried
to push the prices up in Delhi and regarding this I had discussion with Mr.
Mahesh Kanchan, Marketing Head of Carlsberg India Ltd. The discussions
didn't materialise. In Rajasthan it was through AIBA and in Delhi I had spoken
to Mr. Mahesh Kanchan of Carlsberg India Ltd. The discussions were typically
held either through conference calls or through phone calls. For West Bengal
during last year I had discussions with Carlsberg (Mahesh Kanchan) wherein
price restructuring was discussed which included sharing of calculations of
basic price to MRP. In Odisha, 2-3 years ago when the government increased
duty and reduced manufacturers prices, through AIBA we had discussions
wherein we discussed pricing and the way forward to work with the government
to rationalise the pricing."
202.Further, in his subsequent deposition on oath before the DG, Mr. Kiran Kumar admitted
to have talked to the Managing Directors and other key persons of OP-3 and OP-4:
"As far as I can recall, I have interacted with the following persons in various
companies:
Suo Motu Case No. 06 of 2017 198
S. Company
Name of the person(s)
No. Name
Mr. Anand Shukla, Profit Center Head--South
Mr. T.J. Venketashwaran, Profit Center Head--Central
Mr. Shalabh Seth, Head of Sales and later MD
SAB Mr. Diwakaran S., Regional Head--South
1. Miller Mr. Sundeep Kumar, Corporate Affairs Head
India Mr. Nilojit Guha, Sales Head
Mr. Deepak Malhotra, Sales Head (after Mr. Nilojit Guha)
Mr. Anil Arya, Finance Head
Mr. Sheshu Kumar, handling MIS
Mr. Michael Jensen, MD
Carlsberg Mr. Anil Bahl, Head of Sales
2.
India Mr. Mahesh Kanchan, Head of Marketing
Mr. Manoj, Regional Head--North
... Bulk of the discussions would have been over telephone. Some email
exchanges have also happened on pricing details, as well as some text and
WhatsApp messages. There were a few personal meetings as well."
203.Mr. Shekhar Ramamurthy of OP-1 has also named Mr. Kiran Kumar as one of the
employees of OP-1 who had interactions with competitors. Mr. Shalabh Seth of OP-3 has
also stated that his discussions on pricing, EBP and discounts were mostly with Mr.
Kiran Kumar of OP-1 and Mr. Anil Bahl of OP-4.
204.As such, the active involvement of Mr. Kiran Kumar in the anti-competitive activities of
OP-1 is evident. Also, in its lesser penalty application, OP-1 has named Mr. Kiran
Kumar as one of the individuals involved on its behalf in cartelisation conduct. Hence,
the Commission holds Mr. Kiran Kumar liable in terms of Section 48(2) of the Act for
the anti-competitive conduct of OP-1.
205.The last individual found liable by the DG under Section 48(2) of the Act is Mr. Perry
Goes, Head of Strategic Planning & Analytics of OP-1 till 28.08.2017.
206.At the outset, it is noted that Mr. Perry Goes has also submitted before the Commission
that an officer of a company can only be liable in terms of Section 48(2) of the Act once
the company is found to be in contravention of the provisions of Act. In this regard, since
the Commission has already found OP-1 to be in contravention of the provisions of the
Suo Motu Case No. 06 of 2017 199
Act above, the role and liability of its individuals in terms of Section 48 of the Act can
now be examined.
207.The DG has noted that Mr. Goes was one of the key persons who attended the various
meetings of OP-5 on behalf of OP-1 where the OPs had close interactions with each
other. Further, the Commission notes that Mr. Perry Goes was the sender and recipient of
multiple e-mails including e-mails dated 29.07.2013, 01.08.2013, 17.04.2015,
20.04.2015, 22.01.2015, 31.10.2016 and 07.11.2016 extracted above with respect to
cartelisation in the States of Delhi, Odisha and Rajasthan.
208.Mr. Kiran Kumar, in his statement before the DG, has named Mr. Perry Goes as one of
the persons who had interacted with OP-1's counterparts in competition companies. In its
reply to the DG, OP-4 has also stated that the decision to curtail supply in the State of
Odisha in 2015 took place through OP-5 and discussions between Mr. Shekhar
Ramamurthy. Mr. Michael Jensen, Mr. Shalabh Seth, Mr. Sovan Roy, Mr. Dhiraj Kapur,
Mr. Manish Shyam, Mr. Perry Goes and Mr. Chris White.
209.As such, the active involvement of Mr. Perry Goes in the anti-competitive activities of
OP-1 is evident.
210.Though Mr. Goes has alleged before the Commission that principles of natural justice
against him have been violated as the DG did not grant Mr. Goes an opportunity to
present his defense during investigation, the Commission notes in this regard that Mr.
Goes has been given full opportunity by the Commission to file his
objections/suggestions, if any, against the DG Report including against the evidences
collected by the DG against Mr. Goes and the analysis made by the DG in regards
thereto. Yet, Mr. Goes has not refuted any of the e-mails sent/received by him. He has
only stated that he was marked in the communications related to industry issues which
OP-5 was representing before the Government Authorities, as he was tasked with
representing OP-1 at OP-5. Therefore, all communications wherein Mr. Goes is marked
as well as communications of Mr. Goes with Mr. Sovan Roy of OP-5 must be seen in
this light.
Suo Motu Case No. 06 of 2017 200
211.In the opinion of the Commission, the industry issues which OP-5 was taking up with the
Government Authorities collectively on behalf of the other OPs, included seeking similar
price increase as well as stoppage of supplies, which conduct of OP-5 has already been
held above to be in violation of the provisions of the Act. Further, OP-1, in its lesser
penalty application, has categorically named Mr. Perry Goes as one of the individuals
involved on its behalf in cartelisation conduct. As such, Mr. Perry Goes, representing
OP-1 at OP-5 for such anti-competitive conduct, is liable in terms of Section 48(2) of the
Act, for OP-1's conduct.
SABMiller India Limited (now renamed as Anheuser Busch InBev India Ltd.)
212.The first individual found liable by the DG under Section 48(1) of the Act is Mr. Paolo
Alberto Francesco Lanzarotti, Former Managing Director from June 2009 till 2012. The
next individual found liable by the DG under Section 48(1) of the Act is Mr. Grant
Murray Liversage, Former Managing Director from August 2013 till December 2014.
213.In regard to these two individuals, the Commission notes that vide its order dated
07.01.2020, the Commission had noted that the DG's investigation report could not be
served upon these two individuals as the last known addresses of these two individuals
submitted by AB InBev were of Slovakia and Mozambique. As such, the Commission
decides to drop the proceedings against these two individuals.
214.The third individual found liable by the DG under Section 48(1) of the Act is Mr.
Shalabh Seth, Former Managing Director from January 2015 till 31.10.2016, Former
Sales Director from April 2012 till 2014 and Former Director Supply Chain from 2009
till March 2012.
215.The Commission notes that Mr. Shalabh Seth was the sender and recipient of multiple e-
mails including e-mails dated 12.10.2009, 13.10.2009, 01.06.2010, 02.06.2010,
22.12.2011, 09.08.2013, 15.11.2013, 06.03.2015, 31.03.2015, 09.04.2015, 17.04.2015,
19.04.2015, 22.04.2015, 28.04.2015, 29.04.2015 and 05.06.2015 extracted above with
respect to cartelisation in the States of Andhra Pradesh, Delhi, Karnataka, Odisha,
Rajasthan, and with respect to cartelisation in the sale and purchase of second-hand
bottles. Further, he exchanged WhatsApp messages with Mr. Kiran Kumar of OP-1 in
Suo Motu Case No. 06 of 2017 201
2013, which have also been extracted above and used to establish cartelisation against
OP-3. OP-3 has also categorically named Mr. Shalabh Seth as one of the individuals
involved on its behalf in the cartelisation conduct, in its lesser penalty application.
216.When asked about his meetings with competitors during his deposition on oath before
the DG, Mr. Shalabh Seth, while admitting to have had anti-competitive talks with the
competitors, stated that:
"Yes, we used to meet at least four times a year at AIBA meetings and also at
other places to discuss prospective quotes and also other industry issues like
state excise policy etc. so that we collectively get a better bargain from the
government..."
217.In his subsequent deposition, he stated as under:
"There were discussions with competitors on beer pricing and EBP between
2008 to 2016 in various capacities held by me during the said period (Director-
Supply Chain from January-2009 to Sept-2011, Director Sales from Oct 2011 to
Dec 2014, and Managing Director from January 2015 till October 2016).
However, I was specifically involved from October 2011 to October 2016. Other
than pricing, there were discussions on patent bottle pricing, discounts in a few
States, and Institutional Sales (where I was not privy to discussions). My
discussions on pricing, EBP and discounts were mostly with Mr. Kiran Kumar
(from UB) and Mr. Anil Bahl (from Carlsberg). On patent bottles, my
discussions were with Mr. Santosh Kumar and Mr. Sudesh Shenoy (both from
UB) ..."
218.In his statement, Mr. Shekhar Ramamurthy of OP-1, specifically named Mr. Shalabh
Seth as one of the persons from competitor companies with whom he had personal
interactions on the issue of pricing in Rajasthan, Odisha, Andhra Pradesh/Telangana
largely over telephone, e-mails and sometimes over text SMSs. Mr. Kiran Kumar of OP-
1 also, in his statement, named Mr. Shalabh Seth as one of the persons who had
interacted with their counterparts in competition companies. In his statement, Mr.
Michael Jensen of OP-4 also stated to have had interactions with Mr. Shalabh Seth on
generalised policy terms and directional interactions and lobby activities with the
government. Mr. Nilojit Guha of OP-3 also stated that it was Mr. Shalabh Seth who
introduced him to Mr. Kiran Kumar of OP-1.
Suo Motu Case No. 06 of 2017 202
219.Thus, evidently, Mr. Shalabh Seth was a part of the anti-competitive activities by OP-3
ever since he was employed in OP-3, in various roles. In his objections/suggestions to the
DG Report as well as during the oral hearing, Mr. Shalabh Seth did not refute his role in
cartelisation on behalf of OP-3. Further, he is also a lesser penalty applicant before the
Commission. As part of his submissions, Mr. Seth has simply submitted that he has
provided certain vital additional evidence which has added significant value to the DG's
investigation and to the evidence that was already in the possession of the
Commission/DG. Such significant additional value is evident from the fact that during
the depositions of the representatives of other players involved in the co-ordination, the
DG has extensively referred to/relied on the documentary evidence submitted by Mr.
Shalabh Seth as part of his lesser penalty application as well as the statements made
during his depositions before the DG.
220.Thus, the Commission holds Mr. Shalabh Seth guilty in terms of Section 48(1) of the Act
being the former Managing Director of OP-3 and as such, in-charge of and responsible
to OP-3 for the conduct of its business, as well as under Section 48(2) of the Act having
played an active role in the cartel conduct.
221.The fourth individual found liable by the DG under Section 48(2) of the Act is Mr.
Nilojit Guha, Former Sales Director from January 2015 till 15.11.2016 and Former Vice
President Sales Control from May 2011 till December 2014.
222.The Commission notes that Mr. Nilojit Guha was the sender and recipient of multiple e-
mails including e-mails dated 15.09.2009, 08.03.2010 and 09.08.2013 extracted above
with respect to cartelisation in the States of Delhi and Odisha.
223.In his deposition on oath, Mr. Nilojit Guha stated as under:
"I do not deny having discussions with mainly Mr. Kiran Kumar on a few
occasions on the pricing issues. I recollect having contacted, Mr. Kiran Kumar
at times on pricing issues. For example, states like Delhi, Orissa, Maharashtra,
Karnataka, West Bengal mainly. In these pricing discussions I played the role of
a coordinator as per instruction of my superior (Mr. Shalabh Seth. I didn't have
the authority to decide about the pricing for any State. Whatever discussion I
had with Mr. Kiran Kumar was mainly with the intention that the industry gets
the price increase to recover the rising cost of raw materials ..."
Suo Motu Case No. 06 of 2017 203
"After seeing the old mails which I do not remember, the mails being very old, I
now admit that at times I had coordinated with the competitor (mainly with Mr.
Kiran Kumar of UB) for application of our price requests in certain States. This
coordination role I had played mainly on the instructions of my superiors who
would fix the price and advise me to go for the application for price revision in
different States..."
224.Further, in his statement, Mr. Kiran Kumar of OP-1 has also named Mr. Nilojit Guha as
one of the persons from OP-3 with whom he had anti-competitive contacts. Moreover, in
regard to the e-mail exchanges of September 2009 and March 2010 between them, Mr.
Kiran Kumar stated that "... Mr. Nilojit Guha and I might have discussed our respective
company's prices and aligned our prices accordingly ...".
225.Mr. Shekhar Ramamurthy of OP-1, in his statement, also named Mr. Nilojit Guha as one
of the persons from competitor companies with whom his colleagues had anti-
competitive interactions.
226.OP-3 has also categorically named Mr. Nilojit Guha as one of the individuals involved
on its behalf in the cartelisation conduct, in its lesser penalty application. In his
objections/suggestions to the DG Report as well as during the oral hearing, Mr. Nilojit
Guha has also not disputed the findings of the DG against him.
227.As such, the Commission holds Mr. Nilojit Guha guilty in terms of Section 48(2) of the
Act on behalf of OP-3.
228.The fourth individual found liable by the DG under Section 48(2) of the Act is Mr.
Suryanarayana Diwakaran, Former Vice President Sales till 15.11.2016, Former Vice
President Sales South from May 2011 till 2016 and Former General Manager Sales
South from 2009 till April 2011.
229.The Commission notes that Mr. Suryanarayana Diwakaran was the sender and recipient
of multiple e-mails including e-mails dated 09.06.2009, 30.10.2010 and 25.01.2011
extracted above with respect to cartelisation in the States of Andhra Pradesh and
Karnataka.
230.Mr. Shalabh Seth of OP-3 has also stated that Mr. S. Diwakaran was one of the
employees of OP-3 who had discussions with company's competitors. Mr. Kiran Kumar
Suo Motu Case No. 06 of 2017 204
of OP-1 also admitted to having anti-competitive contacts with Mr. S. Diwakaran of OP-
3.
231.OP-3 itself has also categorically named Mr. Suryanarayana Diwakaran as one of the
individuals involved on its behalf in the cartelisation conduct, in its lesser penalty
application. In his objections/suggestions to the DG Report as well as during the oral
hearing, Mr. Suryanarayana Diwakaran has also not disputed the findings of the DG
against him. He has only stated that he was not summoned by the DG for recording of his
statement which shows that his role was not pivotal in the anti-competitive agreement.
Further, he ceased to have any participation in the cartel with effect from 15.11.2016
since he had left OP-3 on 15.11.2016. Also, throughout his employment, Mr. Diwakaran
never held any position of influence at OP-3 and was only acting upon the instructions of
his seniors. As such, a lenient view ought to be adopted by the Commission qua Mr.
Diwakaran.
232.On the basis of the undisputed evidences against him found by the DG, the Commission
holds Mr. Suryanarayana Diwakaran guilty in terms of Section 48(2) of the Act on behalf
of OP-3.
233.The last individual found liable by the DG under Section 48(2) of the Act is Mr. Anil
Arya, Former Director Solutions Business Unit India from June 2017 till 15.10.2018,
Former Vice President Financial Control from October 2014 till May 2017, Former
General Manager Operations Finance from August 2012 till September 2014, Former
General Manager Decision Support Sales from May 2011 till July 2012 and Former
Head Decision Support Sales from 2009 till April 2011.
234.The Commission notes that Mr. Anil Arya was the sender and recipient of multiple e-
mails including e-mails dated 07.09.2011, 12.09.2011, 22.12.2011 and 09.08.2013
extracted above with respect to cartelisation in the States of Delhi, Karnataka and
Maharashtra.
235.Further, Mr. Shalabh Seth of OP-3 has also stated that Mr. Anil Arya was one of the
employees of OP-3 who had discussions with company's competitors. Mr. Kiran Kumar
Suo Motu Case No. 06 of 2017 205
of OP-1 also admitted to having anti-competitive contacts with Mr. Anil Arya, Finance
Head of SABMiller.
236.OP-3 has also categorically named Mr. Anil Arya as one of the individuals involved on
its behalf in the cartelisation conduct, in its lesser penalty application. In his
objections/suggestions to the DG Report as well as during the oral hearing, Mr. Anil
Arya has also not disputed the findings of the DG against him. He has only submitted
that he was not the decision-making Authority or pivotal in the functioning of this cartel
arrangement.
237.As such, the Commission holds Mr. Anil Arya guilty in terms of Section 48(2) of the Act
on behalf of OP-3.
Carlsberg India Private Limited
238.The first individual found liable by the DG under Section 48(1) of the Act is Mr. Soren
Lauridsen, Former Managing Director from 2010-11 till March 2014. The Commission
notes that vide its order dated 05.02.2020, the Commission had noted that the DG's
investigation report could not be served upon Mr. Soren Lauridsen as his last known
address submitted by OP-4 was of Malaysia. As such, the Commission decides to drop
the proceedings against Mr. Soren Lauridsen.
239.The next individual found liable by the DG under Section 48 of the Act is Mr. Michael
Norgaard Jensen, Former Managing Director from April 2014 till April 2017 and Former
Deputy Managing Director from June 2013 till March 2014.
240.The Commission notes that Mr. Michael Jensen was the sender and recipient of multiple
e-mails including e-mails dated 13.04.2012, 15.04.2012, 02.05.2012, 11.05.2012,
06.03.2015, 27.03.2015, 31.03.2015, 09.04.2015, 17.04.2015, 22.04.2015, 28.04.2015,
29.04.2015, 30.04.2015 and 05.06.2015 extracted above with respect to cartelisation in
the States of Delhi, Odisha, Rajasthan, West Bengal.
241.In his deposition on oath before the DG, Mr. Jensen admitted to contacts between the
competitors, stating as under:
Suo Motu Case No. 06 of 2017 206
"At local levels in select cases, there had been exchange of MRPs between
competition. While making requests for price revisions, especially in free market
States, sometimes the Local Heads would exchange pricing targets with their
counterparts. Even the timing of the price revision requests in free states would
be shared with the competitors ... There had been cases where part of the
management had been exchanging price information with competitors, for
example in 2012 and 2015 in West Bengal ... In few instances, I was also
personally involved in interacting with Mr. Shalabh Seth (SABMiller) and Mr.
Shekhar Ramamurthy (UB), both through AIBA and otherwise, for example in
the context of the extraordinary events in Orissa in 2015 ..."
"My interactions were primarily with the other CEOs, mainly via AIBA
meetings, on calls or emails. The nature of these interactions were primarily in
the generalised policy terms and directional interactions and lobby activities
with the government. I had these interactions with Mr. Shekhar Ramamurthy (of
UB) and Mr. Shalabh Seth (of SABMiller)."
242.In his statement, Mr. Shekhar Ramamurthy of OP-1 stated that "Some of the names from
competitor companies with whom I personally interacted - Mr. Paolo Lanzarotti, Mr.
Chris White, Mr. Michael Jensen, Mr. Shalabh Seth and Mr. Pawan Jagetia ..."
243.OP-4 has also categorically named Mr. Michael Jensen as one of the individuals involved
on its behalf in the cartelisation conduct, in its lesser penalty application. In his
objections/suggestions to the DG Report as well as during the oral hearing, Mr. Michael
Jensen has also not disputed the findings of the DG against him. However, he has
submitted that (i) in relation to co-ordination on pricing in West Bengal in 2012, he was
merely a consultant at OP-4 during this period, and had no Authority to make any key
decisions at OP-4; (ii) with respect to anti-competitive conduct in the State of Rajasthan,
there has been no AAEC as the entire e-mail evidence relied on by the DG to find a
violation in Rajasthan relates to a period between 2015 and 2016; however, since 2015
till recently in 2019, the Beer companies did not get any price increase based on a price
increase request made by them. All price increases have been a result of changes in the
tax structure in Rajasthan only; and (iii) with respect to Delhi, Mr. Jensen had no role in
the discussions and he did not participate in any interactions with competitors. He was
only CC'd in the e-mails exchanged. In any event, there was no implementation in Delhi
as the Delhi Government did not accept the price increase request.
Suo Motu Case No. 06 of 2017 207
244.The Commission notes that the objections taken by Mr. Jensen with respect to the State
of West Bengal do not hold good as his designation in OP-4 while being a part of the
anti-competitive activity is not relevant for the purposes of Section 48(2) of the Act.
Regarding the objections taken qua State of Rajasthan, it is noted that the Commission
has already dealt with the AAEC aspect in the State of Rajasthan above where analysis
for the said State has been made. As far as objections in respect of Delhi are concerned,
it is noted that Mr. Jensen was not merely CC'd but rather the addressee/recipient of
multiple e-mails dated 11.05.2012. Further, the implementation aspect with respect to
Delhi also has already dealt with above where analysis for the said State has been made.
245.As such, the Commission holds Mr. Michael Jensen guilty in terms of Section 48(1) of
the Act being the former Managing Director of OP-4 and as such, in-charge of and
responsible to OP-4 for the conduct of its business, as well as under Section 48(2) of the
Act having played an active role in the cartel conduct.
246.The third individual found liable by the DG under Section 48(1) of the Act is Mr. Nilesh
Patel, Managing Director (de facto) since May 2017.
247.The Commission notes that Mr. Nilesh Patel was the sender and recipient of multiple e-
mails including e-mails dated 17.01.2018, 19.01.2018 and 15.02.2018 extracted above
with respect to cartelisation in the States of Maharashtra and West Bengal. Though such
e-mails were mostly internal e-mails of OP-4, nonetheless, the same show the knowledge
of Mr. Nilesh Patel about the anti-competitive conduct of OP-4.
248.In his statement, Mr. Shalabh Seth of OP-3, has named Mr. Nilesh Patel as one of the
persons of OP-4 who had anti-competitive contacts with his counterparts from OP-1 and
OP-3.
249.OP-4 has also categorically named Mr. Nilesh Patel as one of the individuals involved on
its behalf in the cartelisation conduct, in its lesser penalty application.
250.In his objections/suggestions to the DG Report, Mr. Patel has submitted that he was
appointed as the Managing Director of OP-4 only from 26.04.2018, and therefore, had no
executive decision-making role/responsibility at OP-4 prior to this date. Prior to this, Mr.
Patel was not involved in handling the day-to-day affairs of OP-4 and was not taking any
Suo Motu Case No. 06 of 2017 208
key decisions. On 05.05.2017, Mr. Patel was nominated by Carlsberg Breweries A/S as a
Director at OP-4 Board. Therefore, his involvement in the functioning of OP-4 (until
26.04.2018) was as Asia region support and very limited, and he did not have any
executive authority. As such, the evidence relied upon by the DG to find Mr. Patel liable,
which pertains to the period prior to him being appointed as the Managing Director of
OP-4, i.e., before 26.04.2018, cannot be relied upon and post this date, OP-4 has not
engaged in any anti-competitive conduct. It was only out of abundant caution that Mr.
Patel was named as one of the persons for whom OP-4 sought lesser penalty under the
lesser penalty application filed by it.
251.In this regard, the Commission notes the submission of Mr. Pawan Jagetia of OP-4, who
has submitted that Mr. Nilesh Patel was, in fact, the de facto Managing Director of OP-4
from May 2017 onwards, without OP-4's Board approval. Such submission of Mr.
Jagetia, coupled with the e-mail communications sent/received by Mr. Nilesh Patel,
categorically show Mr. Patel's knowledge, if not involvement, of the anti-competitive
conduct of OP-4 prior to 26.04.2018.
252.With regard to the deposition of Mr. Shalabh Seth of OP-3, Mr. Patel has submitted that
he has never met and does not know Mr. Shalabh Seth. He had never interacted with Mr.
Seth, and there is no evidence indicating that there was any communication between
them. Therefore, Mr. Seth's deposition against Mr. Patel should not be considered.
253.In this regard, the Commission notes that even if the statement of Mr. Shalabh Seth of
OP-3 of having anti-competitive contacts with Mr. Nilesh Patel is disregarded by the
Commission, yet the fact of Mr. Nilesh Patel being the de facto, if not de jure, Managing
Director of OP-4 since 2017, coupled with the e-mail communications sent/received by
him, show his knowledge of the anti-competitive conduct of OP-4. His submission that
his name was mentioned in the lesser penalty application filed by OP-4 only by way of
abundant caution, cannot be accepted.
254.As such, being the de facto Managing Director if OP-4, and thereby in-charge of and
responsible to OP-4 for the conduct of its business since May 2017, the Commission
holds Mr. Nilesh Patel liable in terms of Section 48(1) of the Act for the anti-competitive
conduct of OP-4.
Suo Motu Case No. 06 of 2017 209
255.The fourth individual found liable by the DG under Section 48(2) of the Act is Mr.
Pawan Jagetia, Former Deputy Managing Director from September 2014 till March
2018.
256.The Commission notes that with respect to Mr. Pawan Jagetia, the only evidence placed
on record by the DG is the internal e-mail dated 15.02.2018 of OP-4 extracted above
with respect to cartelisation in the State of West Bengal in which Mr. Jagetia was the
sender. In this e-mail, Mr. Pawan Jagetia advises Mr. Nilesh Patel of OP-4 to hold off
registration of brands of OP-4 for sometime. Apart from the above, there is no other
evidence which may show the involvement of Mr. Pawan Jagetia in the anti-competitive
conduct of OP-4. As such, in the opinion of the Commission, for lack of evidences, Mr.
Pawan Jagetia cannot be held liable in terms of Section 48(2) of the Act for the anti-
competitive conduct of OP-4.
257.However, the Commission notes that Mr. Nilesh Patel of OP-4 has stated that though he
has no knowledge of division of responsibility or interaction between Mr. Michael
Jensen, the Managing Director at the time and Mr. Pawan Jagetia, the deputy Managing
Director, the "day to day pricing issues are discussed with Director Marketing &
Director Sales with key inputs from partner representative Shri Pawan Jagetia."
258.Further, Mr. Shekhar Ramamurthy of OP-1 also admitted to have had personal
interactions, inter alia, with Mr. Pawan Jagetia including a WhatsApp chat in January
2018 about the repercussions of new West Bengal Liquor Policy on their respective
companies' beer prices. Mr. Pawan Jagetia, though denied having any discussion on cost
cards for price revision issues with MR. Ramamurthy, has admitted to have had
communications with Mr. Shekhar Ramamurthy on tax changes which impacted
production and supply, besides few communications about litigation against prohibition
in Bihar. The denial of Mr. Pawan Jagetia to have exchanged any price related
information with Mr. Shekhar Ramamurthy has not been found by the DG to be tenable,
as he had admitted to have received the 'Wish List' for West Bengal Excise Policy which
included some discussion on pricing issues. OP-4 also, in its reply before the DG, stated
that Mr. Pawan Jagetia shared the overall responsibility of management and affairs of the
company on day-to-day basis with Mr. Michael Jensen during his tenure in the company.
Suo Motu Case No. 06 of 2017 210
259.In his objections/suggestions to the DG Report, Mr. Pawan Jagetia has stated that he was
not involved in the pricing decisions of OP-4. Rather, as Deputy Managing Director of
OP-4, he was only in-charge of supply chain and business development. This is also
evident from the employment contract and organisational structure of OP-4.
260.Mr. Jagetia has submitted that his ability to reply to the DG Report and defend himself is
seriously limited by the lack of information in his professional e-mail account, which
OP-4, citing false reasons, has refused to supply to him. The same, if available, would
show that no pricing related decisions were taken by Mr. Jagetia.
261.Further, Mr. Jagetia has stated that the statements relied upon by the DG against him are
of two interested witnesses viz., Mr. Nilesh Patel and Mr. Michael Jensen. On the
contrary, the evidence on record shows that Mr. Michael Jensen, Managing Director was
the sole Authority taking all decisions relating to pricing.
262.In the view of the Commission, even if the above submission of Mr. Jagetia of him not
being involved in price fixing is accepted, in the present matter, OP-4 was involved in
cartelisation not only by means of price fixing, but also by way of limiting supplies,
specifically in the State of West Bengal, with respect to which, internal e-mail dated
15.02.2018 was CC'd to Mr. Jagetia. Further, the Commission notes that though Mr.
Jagetia refers to Mr. Nilesh Patel and Mr. Michael Jensen as interested witnesses, it is not
clear as to what interest would they have in pointing fingers at Mr. Jagetia if he was not
involved.
263.As such, the Commission finds Mr. Pawan Jagetia guilty in terms of Section 48(1) of the
Act on behalf of OP-4.
264.The fifth individual found liable by the DG under Section 48(2) of the Act is Mr. Dhiraj
Kapur, Vice President Corporate Affairs.
265.The Commission notes that Mr. Dhiraj Kapur was the sender and recipient of multiple e-
mails including e-mails dated 01.08.2013, 07.08.2013, 17.04.2015, 20.04.2015,
22.04.2015 and 28.10.2016 extracted above with respect to cartelisation in the
States/UTs of Delhi, Odisha, Rajasthan, West Bengal.
Suo Motu Case No. 06 of 2017 211
266.OP-4 has also categorically named Mr. Dhiraj Kapur as one of the individuals involved
on its behalf in the cartelisation conduct, in its lesser penalty application. In his
objections/suggestions to the DG Report as well as during the oral hearing, Mr. Dhiraj
Kapur has not disputed the findings of the DG against him. He has rather submitted with
respect to fixation of EBP and MRP, that his role, as the Vice-President-Corporate
Affairs, was limited to co-ordinating with OP-5 and Government agencies for seeking
price revisions and favourable policy decisions. However, he has made submissions
similar to those made by Mr. Michael Jensen, with respect to cartelisation in the States of
West Bengal, Rajasthan and Delhi.
267.The Commission has already addressed such submissions above while fixing liability of
Mr. Michael Jensen. Further, the communications between Mr. Dhiraj Kapur and Mr.
Sovan Roy of OP-5 are self-explanatory.
268.As such, the Commission holds Mr. Dhiraj Kapur guilty in terms of Section 48(2) of the
Act on behalf of OP-4.
269.The sixth individual found liable by the DG under Section 48 of the Act is Mr. Anil
Bahl, Vice President Mont and Premium Business since 2018 and Former Sales
Director/Sales Head/Vice President Sales from 2009-10 till 2017-18.
270.The Commission notes that Mr. Anil Bahl was the sender and recipient of multiple e-
mails including e-mails dated 13.04.2012, 15.04.2012, 02.05.2012, 11.05.2012,
20.01.2015, 23.03.2015, 20.02.2017, 21.02.2017, 17.01.2018 and 15.02.2018 extracted
above with respect to cartelisation in the States/UTs of Delhi, Karnataka, West Bengal,
Maharashtra, Odisha and Puducherry.
271.In September, 2016, Mr. Anil Bahl also had a WhatsApp chat with Mr. Nilojit Guha of
OP-3, exchanging business sensitive information, as extracted below:
Suo Motu Case No. 06 of 2017 212
272.In his deposition on oath before the DG, Mr. Michael Jensen of OP-4 stated as under:
"There had been cases where part of the management had been exchanging
price information with competitors, for example in 2012 and 2015 in West
Bengal. .... Mr. Anil Bahl would be one such person who would himself contact
or approve such contacts with the competitors."
"... There had been cases where part of the management had been exchanging
price information with competitors, for example in 2012 and 2015 in West
Bengal. I understand that Mr. Anil Bahl would be one such person who would
himself contact or approve such contacts with the competition. Mr. Anil Bahl
had interactions with his counterparts in primarily UB and SABMiller.
Corporate Affairs personnel from these competitor companies were regularly in
contact on these issues ..."
273.Further, Mr. Kiran Kumar of OP-1 also admitted to have had interactions regarding
pricing and other issues, inter alia, with Mr. Anil Bahl and Mr. Shalabh Seth of OP-3
also stated that his "... discussions on pricing, EBP and discounts were mostly with Mr.
Kiran Kumar (from UB) and Mr. Anil Bahl (from Carlsberg)."
Suo Motu Case No. 06 of 2017 213
274.OP-4 has also categorically named Mr. Anil Bahl as one of the individuals involved on
its behalf in the cartelisation conduct, in its lesser penalty application. Additionally, OP-
4, in its response to a DG notice, also stated that "CIPL and UB, and potentially UB and
SAB would discuss among themselves to confirm the proposed price increases. These
discussions would take place over the phone and sometimes in person between Mr. Anil
Bahl and Mr. Kiran Kumar. Initially, Mr. Anil Bahl did not have a direct contact with
SAB for West Bengal ... coordination was SAB was done by UB. Later on, in 2015, Mr.
Anil Bahl also had contact with Mr. Shalabh Seth from SAB".
275.In his objections/suggestions to the DG Report as well as during the oral hearing, Mr.
Anil Bahl has not disputed the findings of the DG against him.
276.As such, the Commission holds Mr. Anil Bahl guilty in terms of Section 48(2) of the Act
on behalf of OP-4.
277.The last individual found liable by the DG under Section 48 of the Act is Mr. Mahesh
Kanchan, Former Vice President Marketing (Head Marketing) from 2014-15 till 2018-
19.
278.The Commission notes that Mr. Mahesh Kanchan was the sender and recipient of
multiple e-mails including internal e-mails dated 17.01.2018, 19.01.2018 and 05.02.2018
extracted above with respect to cartelisation in the States of Maharashtra and West
Bengal.
279.Further, Mr. Kiran Kumar of OP-1 had also admitted to have had discussions with Mr.
Mahesh Kanchan regarding basic price and MRP in Delhi and Rajasthan.
280.In his objections/suggestions to the DG Report as well as during the oral hearing, Mr.
Kanchan has not disputed the findings of the DG against him. He has only submitted that
during his employment at OP-4, he did not participate in any meetings with his
counterparts in any manner to fix prices or curtailing supplies and he did not attend any
OP-5 meetings. As such, the evidence relied on by the DG does not show his
involvement in the cartel in any manner. He has also submitted that he had no decisive
role in either the decision of OP-4 to curtail or resume supplies in the States of West
Bengal or Maharashtra. With respect to sharing of information regarding market share,
Suo Motu Case No. 06 of 2017 214
the DG has erred in concluding that OP-4 was privy to sales volumes of its competitors
for it to be able to ascertain their market shares. Market share information is (i) estimated
market share, (ii) available in the industry through market intelligence, and (iii) not
indicative of collusion by any means. For Corporation States, the respective State
Beverage Corporation owned by the Government itself publishes the market shares of all
players. As such, e-mail exchange in this regard is not in violation of the provisions of
the Act.
281.In this regard, the Commission notes that even if direct participation of Mr. Kanchan in
exchange of information by OP-4 is not evidenced by the DG, the statement of Mr. Kiran
Kumar of OP-1 clearly implicates Mr. Mahesh Kanchan in the anti-competitive activities
of OP-4 in the States of Delhi, Rajasthan and West Bengal.
282.As such, the Commission holds Mr. Mahesh Kanchan guilty in terms of Section 48(2) of
the Act on behalf of OP-4.
All India Brewers' Association
283.For the anti-competitive conduct of OP-5, the DG has found Mr. Sovan Roy (alias Mr.
Shobhan Roy), Director General of OP-5 since 07.01.2013, liable in terms of Section 48
of the Act.
284.The DG has noted that Mr. Sovan Roy, as the Director General of OP-5, passed on vital
information amongst the OPs regarding each other's pricing decisions. During his tenure,
anti-competitive decisions were taken in the meetings of OP-5, and Mr. Roy was active
in approaching the State Governments seeking price revisions on behalf of the members
of OP-5. As such, he has been found liable by the DG in terms of Section 48 of the Act.
285.In this regard, the Commission notes that in the preceding paragraphs, numerous e-mails
exchanged by Mr. Sovan Roy, especially with respect to the States of Delhi, Odisha,
Rajasthan, West Bengal, have been extracted. From such e-mails, the active role of Mr.
Roy, in allowing OP-5 to be used as a platform for promoting anti-competitive activities
between OP-1, OP- and OP-4, is clearly visible. Further, being the Director General of
OP-5, Mr. Roy was also in-charge of and responsible to OP-5, for the conduct of its
business, since 2013.
Suo Motu Case No. 06 of 2017 215
286.The submission of Mr. Roy that discussions have taken place on the platform of OP-5
under the belief that conduct of collective representation does not violate the provisions
of the Act, does not hold much water as it is res integra that ignorantia juris non excusat.
Further, the submission of Mr. Roy that he is a paid employee of OP-5 and does not
stand to gain by any direct or indirect violation of the law also does not hold good as
personal gains need not be the sole motive of an individual to engage into an anti-
competitive activity.
287.As such, the Commission finds Mr. Sovan Roy liable in terms of the provisions of
Section 48(1) as well as Section 48(2) of the Act, for the anti-competitive conduct of OP-
5.
Conclusion
288.The Commission, hence, holds OP-1 and OP-3 guilty of contravention of the provisions
of Section 3(3)(a), 3(3)(b) and 3(3)(c) read with 3(1) of the Act from 2009 to at least
October 2018. Further, the Commission holds OP-4 guilty of contravention of the
provisions of Section 3(3)(a), 3(3)(b) and 3(3)(c) read with 3(1) of the Act from 2012 to
at least October 2018 and OP-5 guilty of contravention of the provisions of Section
3(3)(a) and 3(3)(b) read with 3(1) of the Act from 2013 to at least October 2018.
However, no contravention is found against OP-2.
289.As far as individuals' liability is concerned, the Commission holds the following
individuals liable for the anti-competitive conduct of their respective companies:
OP-1
1. Mr. Kalyan Ganguly, Former Managing Director from 2009 till July 2015 48 (1)
Mr. Shekhar Ramamurthy, Managing Director since 01.08.2015, Former
2. Joint President from September 2012 till July 2015 and Former Deputy 48 (1)
President from October 2007 till August 2012
Mr. Kiran Kumar, Chief Sales Officer since 28.08.2017, Former Executive
3. Vice President Sales from July 2014 till June 2017 and Former Senior Vice 48 (2)
President Sales from July 2009 till June 2014
4. Mr. Perry Goes, Head of Strategic Planning & Analytics till 28.08.2017 48 (2)
OP-3
Mr. Shalabh Seth, Former Managing Director from January 2015 till
5. 48 (1)
31.10.2016, Former Sales Director from April 2012 till 2014 and Former
Suo Motu Case No. 06 of 2017 216
Director Supply Chain from 2009 till March 2012
(Is presently working as Chief Supply Chain Officer of OP-1)
Mr. Nilojit Guha, Former Sales Director from January 2015 till 15.11.2016
6. and Former Vice President Sales Control from May 2011 till December 48 (2)
2014
Mr. Suryanarayana Diwakaran, Former Vice President Sales till
7. 15.11.2016, Former Vice President Sales South from May 2011 till 2016 48 (2)
and Former General Manager Sales South from 2009 till April 2011
Mr. Anil Arya, Former Director Solutions Business Unit India from June
2017 till 15.10.2018, Former Vice President Financial Control from
October 2014 till May 2017, Former General Manager Operations Finance
8. 48 (2)
from August 2012 till September 2014, Former General Manager Decision
Support Sales from May 2011 till July 2012 and Former Head Decision
Support Sales from 2009 till April 2011
OP-4
Mr. Michael Norgaard Jensen, Former Managing Director from April 2014
9. till April 2017 and Former Deputy Managing Director from June 2013 till 48 (1)
March 2014
10. Mr. Nilesh Patel, Managing Director since May 2017 48 (1)
Mr. Pawan Jagetia, Former Deputy Managing Director from September
11. 48 (1)
2014 till March 2018
12. Mr. Dhiraj Kapur, Vice President Corporate Affairs 48 (2)
Mr. Anil Bahl, Vice President Mont and Premium Business since 2018 and
13. Former Sales Director/Sales Head/Vice President Sales from 2009-10 till 48 (2)
2017-18
Mr. Mahesh Kanchan, Former Vice President Marketing (Head Marketing)
14. 48 (2)
from 2014-15 till 2018-19
OP-5
15. Mr. Sovan Roy, Director General since 07.01.2013 48 (1) and 48 (2)
Penalty and lesser penalty:
290.Once contravention of the provisions of the Act has been established, the Commission
now proceeds to determine the penalty, if any, to be imposed upon the contravening
parties, under the provisions of Section 27(b) of the Act.
291.The parties have argued various mitigating factors with respect to imposition of penalty
upon them. The same include the following:
(a) True driver of price revisions was the State Governments/Corporations and not the
brewers. The requirement of State Governments to not entertain individual
Suo Motu Case No. 06 of 2017 217
representations by a specific Beer company on industry issues rendered it necessary
for Beer companies to make representations collectively and/or through OP-5. Co-
ordination was not undertaken with any intent to capitalise on consumers but with a
limited purpose to preserve already marginalised profits, and in some instances, to
merely recover costs.
(b) Instances of interaction were sporadic and limited only to certain states.
(c) There has been no AAEC and no harm to consumers. Information exchange did not
have any effect on the approved EBPs since the relevant State Governments decided
not to allow the increase, in some instances, year after year, nor did the State
Governments allow reductions in EBP.
(d) Co-ordination in supply disruptions was only to convince State Departments to not
increase Excise duties unreasonably.
(e) Information exchange and communication regarding premium institutions and buy-
back prices of second-hand bottles were never implemented.
(f) Beer market was characterised by intense volume-based competition amongst the
OPs.
(g) OPs are first-time offenders of competition law.
(h) Beer industry in India has been severely impacted by global COVID-19 pandemic,
and subsequent lockdown announcements and social distancing norms. Sales have
reduced and duties increased. As such, imposition of penalty would have far-reaching
consequences on the highly constrained Beer industry.
292.Further, it has been argued by OP-1 and OP-4 that penalty, if any, ought to be imposed
on the basis of principle of proportionality and relevancy of infringement to the
turnover/profit from the cartel, as envisaged by the Hon'ble Supreme Court in Excel
Crop Care Limited v. Competition Commission of India and Another (2017) 8 SCC 47.
The Commission should consider turnover or profits (as applicable) from the sale of Beer
only in the States affected by the OPs' conduct. The Commission should also not
consider entire time period, i.e., FY 2009-10 to FY 2018-19 as cartel period, and should
rather consider the actual duration of discussions in relevant States as the evidence on
record clearly establishes that discussions were not continuous in nature.
Suo Motu Case No. 06 of 2017 218
293.With regard to such argument raised by the OPs, the Commission observes that the
principle of proportionality envisaged in the Excel Crop Care Ltd. judgment by the
Hon'ble Supreme Court is only in the context of taking 'relevant turnover' rather than
'total turnover' of multi-product companies. It cannot be construed from the said
decision of the Hon'ble Supreme Court that if a cartel meeting takes place only for a day,
or there are instances of e-mail communications only one day in a month, relevant
turnover would be the turnover only from those isolated days. Further, nowhere has the
Hon'ble Supreme Court expressed that relevant turnover should be limited to the
turnover earned from the specific geographic regions in which the effect of the anti-
competitive conduct takes place. Be that as it may, in the present case, the Commission
has arrived at a finding that there existed a nation-wide cartel amongst the OPs from
2009 to at least 10-11.10.2018 (with OP-4 joining from 2012). As such, the 'relevant
turnover/profit' of the OPs would be the turnover/profit earned by the OPs from the sale
and purchase of Beer and ancillary products (like Beer bottles) in India during the cartel
period.
294.The proviso to Section 27(b) of the Act, reads as under:
"Provided that in case any agreement referred to in Section 3 has been entered
into by a cartel, the Commission may impose upon each producer, seller,
distributor, trader or service provider included in that cartel, a penalty of up to
three times of its profit for each year of the continuance of such agreement or
ten percent. of its turnover for each year of the continuance of such agreement,
whichever is higher."
295.As such, in terms of the said proviso, in cases of cartelisation, the Commission is
empowered to impose upon the contravening entities, penalty of up to three times of its
profit for each year of the continuance of the cartel, or 10% of its turnover for each year
of the continuance of the cartel, whichever is higher.
296.Based on revenue and profit details arising from the sale of beer in India certified by a
Chartered Accountant as provided by OP-1 and OP-4, and based on the financial
statements provided by OP-3 (as it stated that its entire turnover and profit as stated in
the financial statements arises from the sale of beer in India), and considering the
mitigating factors put forth by the OPs as stated above, the Commission proceeds to
Suo Motu Case No. 06 of 2017 219
determine the quantum of penalty imposed on the parties @ 0.5 times profit for each year
of the continuance of the cartel or 2% of the turnover for each year of the continuance of
the cartel, whichever is higher. Calculation of the same is as follows:
OP-1
(In ₹)
2% OF 0.5 TIMES OF
FINANCIAL RELEVANT RELEVANT
RELEVANT RELEVANT
YEAR TURNOVER PROFIT
TURNOVER PROFIT
2009-101 15,59,22,51,452 65,89,10,959 31,18,45,029 32,94,55,479
2010-11 28,07,86,55,000 1,44,10,99,000 56,15,73,100 72,05,49,500
2011-12 33,56,19,86,000 1,22,13,03,000 67,12,39,720 61,06,51,500
2012-13 34,92,68,82,000 1,92,37,53,000 69,85,37,640 96,18,76,500
2013-14 37,26,79,83,000 2,58,63,29,000 74,53,59,660 1,29,31,64,500
2014-15 41,13,82,10,000 2,77,46,09,000 82,27,64,200 1,38,73,04,500
2015-16 44,95,98,92,000 3,53,46,63,000 89,91,97,840 1,76,73,31,500
2016-17 41,78,64,83,000 2,17,86,18,000 83,57,29,660 1,08,93,09,000
2017-18 50,35,81,19,000 4,77,54,39,000 1,00,71,62,380 2,38,77,19,500
2018-192 30,98,02,49,425 3,96,63,71,770 61,96,04,988 1,98,31,85,885
Total 3,58,65,07,10,877 25,06,10,95,729 7,17,30,14,218 12,53,05,47,864
OP-3
(In ₹)
2% OF 0.5 TIMES OF
FINANCIAL RELEVANT RELEVANT
RELEVANT RELEVANT
YEAR TURNOVER PROFIT
TURNOVER PROFIT
2009-103 10,93,35,25,320 -1,22,75,76,970 21,86,70,506.41 -61,37,88,484.87
2010-11 14,61,53,80,778 -60,36,39,271 29,23,07,616 -30,18,19,636
2011-12 16,66,28,51,733 -1,19,25,85,323 33,32,57,035 -59,62,92,662
2012-13 19,96,52,54,036 -88,34,95,656 39,93,05,081 -44,17,47,828
2013-14 19,20,22,97,023 -99,73,11,593 38,40,45,940 -49,86,55,797
2014-15 19,39,69,87,494 -1,27,35,88,070 38,79,39,750 -63,67,94,035
2015-16 20,87,70,95,681 -47,36,52,285 41,75,41,914 -23,68,26,143
1
For 315 out of 365 days. Relevant turnover for FY 2009-10 is ₹18,06,72,12,000 and relevant profit is
₹76,35,00,000.
2
For 192 out of 365 days. Relevant turnover for FY 2018-19 is ₹58,89,47,45,000 and relevant profit is
₹7,54,02,38,000.
3
For 315 out of 365 days. Relevant turnover for FY 2009-10 is ₹ 12,66,90,05,530 and relevant profit is ₹-
1,42,24,30,457.
Suo Motu Case No. 06 of 2017 220
2% OF 0.5 TIMES OF
FINANCIAL RELEVANT RELEVANT
RELEVANT RELEVANT
YEAR TURNOVER PROFIT
TURNOVER PROFIT
2016-17 16,17,95,10,000 -3,72,18,70,000 32,35,90,200 -1,86,09,35,000
2017-18 13,58,46,20,000 -98,68,80,000 27,16,92,400 -49,34,40,000
2018-194 7,15,10,32,110 -1,60,20,69,041 14,30,20,642 -80,10,34,521
Total 1,58,56,85,54,175 -12,96,26,68,209 3,17,13,71,084 -6,48,13,34,104
OP-4
(In ₹)
2% OF 0.5 TIMES OF
FINANCIAL RELEVANT RELEVANT
RELEVANT RELEVANT
YEAR TURNOVER PROFIT
TURNOVER PROFIT
20095 79,77,27,273 -73,88,18,182 1,59,54,545.45 -36,94,09,091
2010 1,91,10,00,000 -1,23,70,00,000 3,82,20,000 -61,85,00,000
2011 3,02,80,00,000 -1,86,20,00,000 6,05,60,000 -93,10,00,000
2012 4,31,60,00,000 -1,73,40,00,000 8,63,20,000 -86,70,00,000
Jan 2013 to
6,98,30,00,000 -2,13,10,00,000 13,96,60,000 -1,06,55,00,000
March 14
2014-15 8,37,30,00,000 -2,32,90,00,000 16,74,60,000 -1,16,45,00,000
2015-16 11,82,70,00,000 -1,48,50,00,000 23,65,40,000 -74,25,00,000
2016-17 13,42,20,00,000 -1,67,00,00,000 26,84,40,000 -83,50,00,000
2017-18 14,84,80,00,000 1,06,60,00,000 29,69,60,000 53,30,00,000
2018-196 9,84,72,32,877 96,36,82,192 19,69,44,658 48,18,41,096
Total 75,35,29,60,149 -11,15,71,35,990 1,50,70,59,203 -5,57,85,67,995
297.As can be seen from the above tables, for OP-1, 0.5 times profit for each year of the
continuance of cartel is higher than 2% of turnover for each year of continuance of
cartel; while for OP-3 and OP-4, 2% of turnover for each year of continuance of cartel is
higher than 0.5 times profit for each year of continuance of cartel. As such, the
Commission decides to impose upon OP-1 penalty @ 0.5 times of the profit for each
year of continuance of the cartel, i.e., ₹12,53,05,47,864/- (Rupees One Thousand Two
Hundred and Fifty Three Crores Five Lacs Forty Seven Thousand Eight Hundred and
4
For 192 out of 365 days. Relevant turnover for FY 2018-19 is ₹13,59,44,10,000 and relevant profit is ₹-
3,04,56,00,000.
5
For 225 out of 275 days. Relevant turnover for April to December 2009 is ₹97,50,00,000 and relevant profit is
₹-90,30,00,000.
6
For 192 out of 365 days. Relevant turnover for FY 2018-19 is ₹18,72,00,00,000 and relevant profit is
₹1,83,20,00,000.
Suo Motu Case No. 06 of 2017 221
Sixty Four Only) and upon OP-3 and OP-4, penalty @ 2% of their turnover for each year
of continuance of cartel, i.e., ₹3,17,13,71,084/- (Rupees Three Hundred and Seventeen
Crores Thirteen Lacs Seventy One Thousand Eighty Four Only) and ₹1,50,70,59,203/-
(Rupees One Hundred and Fifty Crores Seventy Lacs Fifty Nine Thousand Two Hundred
and Three Only), respectively.
298.As far as OP-5 is concerned, considering the role and conduct of OP-5 in the cartel
conduct, the Commission decides to impose upon it, penalty @ 3% of the average of its
turnover for the last three preceding financial years of the cartel, which is calculated on
the basis of the income and expenditure accounts provided by OP-5, as follows:
OP-5
(In ₹)
FINANCIAL YEAR INCOME
2016-17 3,62,84,983
2017-18 1,68,09,500
2018-19 94,18,155
Total 6,25,12,638
Average 2,08,37,546
Penalty @ 3% 6,25,126
299.With regard to the individuals of the OPs also, the Commission decides to impose
penalty @ 3% of the average of their incomes, for the last three preceding financial years
of the cartel.
300.Though certain individuals who have left the employment of the OPs have submitted that
penalty, if any, should be calculated for them, on the basis of the incomes derived by
them from the respective OPs at the relevant time of the cartel conduct, the Commission
is of the view that the intention behind imposition of penalty is only to punish the
individuals for their cartel so as to create a deterrent effect. As such, the Commission
imposes penalty uniformly on the individuals by taking their income details for the
preceding three financial years, rather than relating the same to their respective period of
cartel.
Suo Motu Case No. 06 of 2017 222
301.Regarding lesser penalty, it is noted by the Commission that OP-3 was the first lesser
penalty applicant to approach the Commission. As such, it is eligible for up to 100%
reduction in the penalty amount imposed upon it. It is noted by the Commission that the
order passed under Section 26(1) of the Act by the Commission was based on the
disclosures made by OP-3 in its lesser penalty application. At that stage, the Commission
and/or the DG had no evidence in their possession regarding cartelisation between the
OPs. In its lesser penalty application, OP-3 explained the nature and modus operandi of
the cartel and explained the market structure of Beer industry and the different models
being followed in various States apart from submitting evidences with regard to
exchange of e-mail communications between the key managerial personnel of the OPs.
The information and co-operation extended by OP-3 enabled the DG to conduct search
and seizure operation at the premises of the OPs and seize quality evidence. Full and true
disclosures of information and evidence and continuous co-operation provided by OP-3
and its individuals, not only enabled the Commission to order investigation into the
matter, but also helped the Commission in establishing contravention of the provisions of
Section 3(3) of the Act by the OPs. OP-3 and its individuals extended genuine, full,
continuous and expeditious co-operation not only during the course of investigation
before the DG, but also during the subsequent proceedings before the Commission. Mr.
Shalabh Seth also approached the Commission independently as a lesser penalty
applicant, and was granted the same marker status as afforded to OP-3. As such, the
Commission decides to grant to OP-3 and its individuals found liable in terms of Section
48 of the Act viz. Mr. Shalabh Seth, Mr. Nilojit Guha, Mr. Suryanarayana Diwakaran and
Mr. Anil Arya, 100% reduction in the penalty amount imposed upon them.
302.The second lesser penalty applicant before the Commission was OP-1. As the second
applicant, OP-1 is eligible for up to 50% reduction in the penalty amount imposed upon
it. The Commission notes that OP-1 had filed the lesser penalty application on behalf of
itself and its individuals viz. Mr. Shekhar Ramamurthy, Mr. Kiran Kumar, Mr. Shalabh
Seth and Mr. Perry Goes. Being the second lesser penalty applicant in the matter, OP-1
and its 3 individuals (excluding Mr. Shalabh Seth who has been found liable for the
conduct of OP-3) are eligible for reduction in penalty up to 50% of the full penalty
leviable.
Suo Motu Case No. 06 of 2017 223
303.The Commission notes that OP-1 and its individuals had filed the lesser penalty
application after the DG had conducted the search and seizure operations on 10-
11.10.2018. By this time, from the lesser penalty application filed by OP-3, and from the
Dawn Raid, the DG already had the bulk of evidence on the basis of which cartelisation
in the present matter has been established. In its lesser penalty application, OP-1 made
disclosures about discussions and co-ordination between OP-1 and its competitors, inter
alia, in relation to (i) prospective price increases applied for by the OPs before various
State/UTs Authorities like Madhya Pradesh, Chhattisgarh, Andhra Pradesh, Telangana,
Rajasthan, Delhi, Maharashtra, Odisha, Karnataka and Puducherry; (ii) basic prices for
procuring old/used patent bottles; (iii) limiting/stopping the supply of Beer for limited
period in certain States like Odisha, Maharashtra, Rajasthan, West Bengal and Andhra
Pradesh; and (iv) discussions on proposed financial and other incentives to premium
institutions. Though much of such evidence was already in possession of the DG by the
time OP-1 came forward with the same, some evidence submitted by OP-1 has been used
by the Commission above to form a complete trail evidencing anti-competitive conduct
of the OPs, especially in relating to co-ordination in respect of premium institutions in
Bengaluru, Karnataka and with respect to purchase of old/used bottles. Further, the
pricing data furnished by OP-1 during the course of investigation enabled the DG and the
Commission to tabulate the MRP and EBP revisions effected by the OPs over a number
of years, which has helped in mapping price parallelism in respect of Beer sold by the
OPs. Moreover, from the lesser penalty application filed by Mr. Steven Bosch, it is noted
that OP-1 was contemplating to file a lesser penalty application even before the Dawn
Raid was conducted.
304.As such, given the stage at which OP-1 came forward with the disclosures, the quality of
information provided by OP-1, the evidence already in possession of the DG at that time,
and the entire facts and circumstances of the present case, the Commission decides to
grant to OP-1, Mr. Shekhar Ramamurthy, Mr. Kiran Kumar and Mr. Perry Goes,
reduction in penalty to the tune of 40% of the total penalty leviable.
305.The third lesser penalty applicant before the Commission was OP-4. OP-4 has requested
lesser penalty for itself and its individuals viz. Mr. Nilesh Patel, Mr. Michael Jensen, Mr.
Dhiraj Kapur and Mr. Anil Bahl. The Commission notes that OP-4 had filed the lesser
Suo Motu Case No. 06 of 2017 224
penalty application after the DG had conducted the search and seizure operations on 10-
11.10.2018. By this time, from the lesser penalty applications filed by OP-3 and OP-1,
and from the Dawn Raid, the DG already had most of the evidence on the basis of which
cartelisation in the present matter has been established. In its lesser penalty application,
OP-4, while giving details of the cartel in the domestic Beer market, inter alia, explained
the background of the Beer market in India and the market scenario. It explained the
operation of the cartel and provided a list of the key persons of the OPs who were
involved in the cartel. As evidence, it submitted printouts of e-mail communications
between the OPs. Thereafter, during investigation, OP-4 also gave further evidence in the
form of e-mail communications and WhatsApp communications between the employees
of the OPs. Though most of the evidence submitted by OP-4 was already in possession of
the DG by the time OP-4 came forward with the same, some evidence submitted by OP-4
has been used by the Commission above to form a complete trail evidencing anti-
competitive conduct of the OPs, as such providing value addition to the investigation of
the DG. Further, the pricing data furnished by OP-4 during the course of investigation
enabled the DG and the Commission to tabulate the MRP and EBP revisions effected by
the OPs over a number of years, which has helped in mapping price parallelism in
respect of Beer sold by the OPs.
306.As such, given the stage at which OP-4 came forward with the disclosures, the quality of
information provided by OP-4, the evidence already in possession of the DG at that time,
and the entire facts and circumstances of the present case, the Commission decides to
grant to OP-4, Mr. Nilesh Patel, Mr. Michael Jensen, Mr. Dhiraj Kapur and Mr. Anil
Bahl, reduction in penalty to the tune of 20% of the total penalty leviable.
307.Consequently, the penalty amounts imposed upon and payable by the OPs are as follows:
(In ₹)
OP Penalty Imposed Penalty Payable after reduction
OP-1 12,53,05,47,864 7,51,83,28,719
OP-3 3,17,13,71,084 Nil
OP-4 1,50,70,59,203 1,20,56,47,362
OP-5 6,25,126 6,25,126
Suo Motu Case No. 06 of 2017 225
308.As far as the individuals of the OPs are concerned, the penalty amounts calculated for
them and payable by them are as follows:
OP-1
(In ₹)
S. NO. PERSON YEAR INCOME
2016-17 7,94,84,516
2017-18 8,06,32,449
2018-19 12,32,92,801
Mr. Shekhar
1. Total 28,34,09,766
Ramamurthy
Average 9,44,69,922
Penalty Imposed 28,34,098
Penalty Payable 17,00,459
2016-17 61,98,067
2017-18 1,66,25,453
2018-19 2,67,62,253
Mr. Kalyan
2. Total 4,95,85,773
Ganguly
Average 1,65,28,591
Penalty Imposed 4,95,858
Penalty Payable 4,95,858
2016-17 2,27,87,868
2017-18 2,22,19,726
2018-19 3,48,61,518
Mr. Kiran
3. Total 7,98,69,112
Kumar
Average 2,66,23,037
Penalty Imposed 7,98,691
Penalty Payable 4,79,215
2016-17 1,51,89,911
2017-18 1,40,80,765
2018-19 2,22,93,770
Mr. Perry
4. Total 5,15,64,446
Goes
Average 1,71,88,149
Penalty Imposed 5,15,644
Penalty Payable 3,09,387
Suo Motu Case No. 06 of 2017 226
OP-3
(In ₹)
S. NO. PERSON YEAR INCOME
2016-17 19,90,50,236
2017-18 3,46,13,322
2018-19 3,85,83,506
Mr. Shalabh
1. Total 27,22,47,064
Seth
Average 9,07,49,021
Penalty Imposed 27,22,471
Penalty Payable Nil
2016-17 1,85,14,881
2017-18 97,08,974
2018-19 1,52,39,279
2. Mr. Anil Arya Total 4,34,63,134
Average 1,44,87,711
Penalty Imposed 4,34,631
Penalty Payable Nil
2016-17 4,93,46,941
2017-18 32,05,602
2018-19 93,53,889
Mr. Nilojit
3. Total 6,19,06,432
Guha
Average 2,06,35,477
Penalty Imposed 6,19,064
Penalty Payable Nil
2016-17 3,57,74,586
2017-18 15,98,017
Mr. 2018-19 36,65,596
4. Suryanarayana Total 4,10,38,199
Diwakaran Average 1,36,79,400
Penalty Imposed 4,10,382
Penalty Payable Nil
Suo Motu Case No. 06 of 2017 227
OP-4
(In ₹)
S. NO. PERSON YEAR INCOME
2016-17 1,33,90,744
2017-18 2,36,38,489
2018-19 2,07,04,492
Mr. Anil
1. Total 5,77,33,725
Bahl
Average 1,92,44,575
Penalty Imposed 5,77,337
Penalty Payable 4,61,870
2016-17 1,53,61,813
2017-18 1,23,78,773
2018-19 99,51,080
Mr. Dhiraj
2. Total 3,76,91,666
Kapur
Average 1,25,63,889
Penalty Imposed 3,76,917
Penalty Payable 3,01,533
2016-17 1,74,03,961
2017-18 2,75,81,723
Mr. 2018-19 2,26,37,907
3. Mahesh Total 6,76,23,591
Kanchan Average 2,25,41,197
Penalty Imposed 6,76,236
Penalty Payable 5,40,989
2016-17 7,26,35,826
2017-18 4,58,25,868
Mr. 2018-19 37,96,281
4. Michael Total 12,22,57,975
Jensen Average 4,07,52,658
Penalty Imposed 12,22,580
Penalty Payable 9,78,064
20167 8,38,62,952
20175 9,50,31,320
2018-19 3,94,75,513
Mr. Nilesh
5. Total 21,83,69,785
Patel
Average 7,27,89,928
Penalty Imposed 21,83,698
Penalty Payable 17,46,958
7
Calendar Year. Converted from Singaporean $ to INR @ 1$ = ₹54.5.
Suo Motu Case No. 06 of 2017 228
S. NO. PERSON YEAR INCOME
2016-17 2,31,15,080
2017-18 4,06,28,798
2018-19 14,50,906
Mr. Pawan
6 Total 6,51,94,784
Jagetia
Average 2,17,31,595
Penalty Imposed 6,51,948
Penalty Payable 6,51,948
OP-5
(In ₹)
S.
PERSON YEAR INCOME
NO.
2016-17 48,28,758
2017-18 54,89,295
Mr.
2018-19 68,15,622
1. Sovan
Total 1,71,33,675
Roy
Average 57,11,225
Penalty Imposed 1,71,337
ORDER
309.The Commission, in terms of Section 27(a) of the Act, directs the parties to cease and desist in future from indulging in any practice/conduct/activity, which has been found in the present order to be in contravention of the provisions of Section 3 of the Act, as detailed in the earlier part of the present order.
310.Further, under the provisions of Section 27(b) of the Act, the Commission directs the following parties to pay the following amounts of penalty:
(In ₹) S. Amount of Name of Party Amount in Words No. Penalty Rupees Seven Hundred and Fifty One Crores United Breweries
1. 7,51,83,28,719 Eighty Three Lacs Twenty Eight Thousand Limited Seven Hundred and Nineteen Only SABMiller India
2. Limited (now Anheuser Nil Nil Busch InBev India Ltd.) Suo Motu Case No. 06 of 2017 229 S. Amount of Name of Party Amount in Words No. Penalty Rupees One Hundred and Twenty Crores Carlsberg India Private
3. 1,20,56,47,362 Fifty Six Lacs Forty Seven Thousand Three Limited Hundred and Sixty Two Only All India Brewers' Rupees Six Lacs Twenty Five Thousand One
4. 6,25,126 Association Hundred and Twenty Six Only Rupees Four Lacs Ninety Five Thousand
5. Mr. Kalyan Ganguly 4,95,858 Eight Hundred and Fifty Eight Only Mr. Shekhar Rupees Seventeen Lacs Four Hundred and
6. 17,00,459 Ramamurthy Fifty Nine Only Rupees Four Lacs Seventy Nine Thousand
7. Mr. Kiran Kumar 4,79,215 Two Hundred and Fifteen Only Rupees Three Lacs Nine Thousand Three
8. Mr. Perry Goes 3,09,387 Hundred and Eighty Seven Only
9. Mr. Shalabh Seth Nil Nil
10. Mr. Nilojit Guha Nil Nil Mr. Suryanarayana
11. Nil Nil Diwakaran
12. Mr. Anil Arya Nil Nil Mr. Michael Norgaard Rupees Nine Lacs Seventy Eight Thousand
13. 9,78,064 Jensen Sixty Four Only Rupees Seventeen Lacs Forty Six Thousand
14. Mr. Nilesh Patel 17,46,958 Nine Hundred and Fifty Eight Only Rupees Six Lacs Fifty One Thousand Nine
15. Mr. Pawan Jagetia 6,51,948 Hundred and Forty Eight Only Rupees Three Lacs One Thousand Five
16. Mr. Dhiraj Kapur 3,01,533 Hundred and Thirty Three Only Rupees Four Lacs Sixty One Thousand Eight
17. Mr. Anil Bahl 4,61,870 Hundred and Seventy Only Rupees Five Lacs Forty Thousand Nine
18. Mr. Mahesh Kanchan 5,40,989 Hundred and Eighty Nine Only Rupees One Lac Seventy One Thousand
19. Mr. Sovan Roy 1,71,337 Three Hundred and Thirty Seven Only
311.The parties mentioned in the table above are directed to deposit the respective penalty amounts within 60 days of the receipt of the present order.
312.It is made clear that all information used in the present order is for the purposes of the Act and as such, in terms of Section 57 of the Act, does not qualify for grant of confidential treatment.
Suo Motu Case No. 06 of 2017 230313.The Secretary is directed to forward certified copy of the present order to the parties through their respective legal counsel, accordingly.
Sd/-
(Ashok Kumar Gupta) Chairperson Sd/-
(Sangeeta Verma) Member Sd/-
New Delhi (Bhagwant Singh Bishnoi)
Date: 24.09.2021 Member
Suo Motu Case No. 06 of 2017 231