The order, passed under Section 27 of the Competition Act, 2002, targets the Maharashtra Wine Merchants Association, Pune District Wine Merchants Association, and Association of Progressive Liquor Vendors. The CCI found them guilty of violating Sections 3(3)(a) and 3(3)(b), read with Section 3(1) of the Act provisions that prohibit agreements or coordinated conduct affecting competition.
The proceedings began after information was filed by an affected party under Section 19(1)(a), accusing the associations of engaging in collusive behavior. According to the complaint, the associations collectively imposed conditions on manufacturers, distributors, and retailers of alcoholic beverages, effectively deciding how the business should be conducted across Maharashtra.
The complainants alleged that the associations dictated critical commercial terms including retail margins, discount structures, product launch requirements, transportation rules, and credit periods. These activities, if proven, would amount to cartel-like conduct designed to control the market and limit fair competition.
CCI Finds Evidence of Coordinated Commercial Control
After examining emails, circulars, internal communications, and statements recorded during the investigation, the CCI concluded that the associations had indeed engaged in practices that significantly distorted market dynamics. The regulator stated that commercial terms such as margins, cash discounts, and freight charges must be independently determined by each enterprise, but these bodies were instead prescribing them uniformly to their members.
One of the most concerning findings was the imposition of mandatory No-Objection Certificates (NOCs) on manufacturers before launching new liquor products. Such NOCs are not required under any law and were purely an association-driven barrier designed to control which products entered the market.
The CCI described this practice as a direct restriction on supply and market entry, significantly impacting competition and consumer choice. By controlling product availability, these associations gained unwarranted influence over manufacturers and stifled innovation in the liquor industry.
Office-Bearers Also Held Liable
The Commission went a step further and held the office-bearers of the associations personally liable under Section 48 of the Competition Act. This marks a strong message from the regulator that leadership-level decision-making in such associations cannot hide behind institutional structures when engaging in anti-competitive behavior.
While the detailed penalties or financial consequences were not specified in the PIB summary, holding office-bearers responsible is a significant move that sets a precedent for future enforcement in trade associations across India.
Associations Ordered to Cease and Desist
As part of the final order in Case No. 43 of 2019, the CCI directed the associations to stop all forms of collusion immediately. The Commission emphasized that businesses must operate independently and take commercial decisions without coordination that harms competitive market conditions.
Significance for India’s Liquor Industry
The ruling is expected to have far-reaching implications for state-level liquor trade bodies across the country. Many states have complex supply chains involving manufacturers, distributors, wholesalers, and retailers. Trade associations often play an influential role in coordinating activities, but the CCI’s decision makes it clear that any form of price coordination or market control will not be tolerated.
For manufacturers, especially smaller producers, the dismantling of arbitrary restrictions such as NOCs may encourage more product innovation and easier entry into state markets. Consumers, too, may benefit from better pricing, more choices, and improved competition in the long term.
Legal experts expect this order to be cited in future disputes involving trade associations in other sectors, from pharmaceuticals to essential commodities. The CCI’s firm stance reinforces its broader mission of maintaining fair competition and preventing cartel-like structures.