COMPETITION COMMISSION OF INDIA
Case No. 25 of 2016
In Re:
Mr. Aniket Sitaram Kokane
Proprietor of OPTIMUS SALES
Room No. 4, Building No. 5,
Shree Shivshakti CHS, Vaishetpada
No.1, Kurar Village, Malad (East),
Mumbai-400097
....Informant
And
Shri Ganesh Agency,
Through Mr. Sachin Popatlal Nandu
Shop No. 50, New Ashok Nagar,
Cama Estate, W.E. Highway,
Near Hub Mall, Goregaon (East),
Mumbai-400063
....Opposite Party
CORAM
Mr. Devender Kumar Sikri
Chairperson
Mr. S. L. Bunker
Member
Mr. Sudhir Mital
Member
Mr. Augustine Peter
Member
Mr. U. C. Nahta
Member
Case No. 25 of 2016
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Dr. M. S. Sahoo
Member
Order under Section 26(2) of the Competition Act, 2002
1.
The information in the present case has been filed by Mr. Aniket Sitaram
Kokane (hereinafter, the ‘Informant’) under Section 19(1)(a) of the
Competition Act, 2002 (hereinafter, the ‘Act’) against Shri Ganesh
Agency (hereinafter, the ‘Opposite Party’/ ’OP’) alleging, inter alia,
contravention of the provisions of Sections 4 of the Act.
2.
As per the information, the Informant is the proprietor of Optimus Sales,
Malad (East), Mumbai which is a distributor of Bisleri products. As per
the appointment letter dated 27.12.2013 issued by Bisleri International
Private Limited (hereinafter “Bisleri”) to the Informant, he was appointed
as one of the distributors for Malad (East), Mumbai. It has been stated in
the appointment letter that the Company reserves the right to add, alter or
delete the areas of distribution, based on the needs of the trade or the
consumer.
3.
It has been stated in the information that Mr. Sachin Popatlal Nandu is the
owner of the OP, i.e., Shri Ganesh Agency which is the distributor of
Bisleri products in Goregaon (East), Mumbai.
4.
It has been averred that the Informant started facing problems of intrusion
by the OP in his service area, i.e., Malad (East) since the beginning of his
business with regard to the supply of bottled water. It has been claimed in
the information that the OP has been in the business since last 8-9 years
and “…during that period of time he has managed to maintain a good
relation with all the retail outlets in Malad area also & also he has built
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good infrastructure & resources for the business. He has 3 delivery
vehicles & an eicher truck.”
5.
The Informant has stated that when he started delivery in his service area,
i.e., Malad (East), he noticed that the OP was also supplying Bisleri
products in the same area. Aggrieved with the conduct of the OP, the
Informant raised this issue with the Sales Executive and Area Sales
Manager of
Bisleri and sent emails in this regard on 05.05.2014,
12.05.2014, 20.05.2014, 10.11.2014, 27.02.2015, and 06.03.2015.
However, no satisfactory reply was given to him and no action was taken
against the OP by the Bisleri.
6.
It has been claimed by the Informant that when he contacted the proprietor
of the OP to discuss the issue, he openly threatened that he would not
allow any other distributor to settle in Malad (East) area. The Informant
has stated that he recorded audio conversations held between him and the
OP and the officials of Bisleri, which was sent to all concerned but again
no action was taken by Bisleri. The Informant has submitted the recording
of these conversations in a CD.
7.
The Informant has alleged that the OP was dumping a large amount of
stock in Malad (East) area at a very low price depleting the profit margin
and causing huge losses to him. It has been averred by the Informant that
by use of its dominant position in the market, the OP was also threatening
the retailers that if they buy goods from the Informant, the OP would not
supply them with Bisleri products during peak summer time.
8.
It has further been alleged by the Informant that because of the OP’s
simultaneous intrusion and due to lack of support from Bisleri, not a single
distributor has sustained in Malad (East) area for more than a year in the
past.
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9.
The Informant has also explained that the profit margin of mineral water
distributors is less in light of the cost involved in the business. It thus
becomes difficult to sustain if another distributor intrudes in the service
area of the Informant. The Informant has stated that the OP is selling more
units than him in Malad (East) because of the dumping and intrusion.
10.
In a nutshell, the Informant has alleged abuse of dominant position on the
part of the OP by indulging in such conduct. The Informant has stated that
he is suffering losses because of the conduct of the OP.
11.
Aggrieved with the aforesaid conduct of the OP, the Informant has prayed
the Commission to award a compensation of Rs. 20,00,000/- (Rupees
Twenty Lakh only) for the losses occurred to him between December
2013 and January 2016 along with interest; reimbursement of case filing
charges to the tune of Rs.25,000/- (Rupees Twenty Five Thousand only);
and written assurance from the OP that he would not bother the Informant
in future by any means.
12.
The Commission has perused the information and has given a careful
consideration to the materials available on record.
13.
The grievance of the Informant relates to the fact that the OP is operating
in his service area, i.e., Malad (East) in Mumbai, and allegedly selling
Bisleri products at low prices thereby hampering his profits. Further,
allegedly Bisleri did not redress the grievances raised by the Informant.
According to the Informant, the conduct of the OP amounts to abuse of
dominant position in contravention of the provisions of Section 4 of the
Act.
14.
For the purpose of examining the allegations of the Informant under the
provisions of Section 4 of the Act, it is necessary to determine the relevant
market. Thereafter, it would be ascertained whether the OP enjoys a
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position of strength required to operate independently of the market forces
in the relevant market. Only when such a position is enjoyed by the OP,
it would be required to examine whether the impugned conduct amounts
to abuse or not.
15.
The Commission notes that the informant is a distributor of Bisleri
products and allegations appears to have been made in relation to
distribution of bottled water. It is observed that bottled water is different
from tap water in terms of quality, mode of supply and delivery, sources,
price, etc. Further, bottled water is more expensive than municipally
supplied tap water. Sources and delivery systems of tap water are different
from bottled water which is sold over the counter. Bottled water may have
reduced amounts of copper, lead and other metal contaminants since it
does not run through the plumbing pipes whereas tap water is exposed to
metal corrosion. Considering the characteristics and price of different
kinds of bottled water, the Commission is of the view that ‘distribution of
bottled water’ is the relevant product market in the instant case.
16.
The Commission notes that the Informant and the OP, as distributors of
Bisleri products, are operating in the localities of Mumbai. Considering
the factors such as cost of transportation, logistics, and taxation etc.,
conditions of competition in Mumbai for distribution of bottled water can
be distinguished from other cities in India. Thus, the relevant geographic
market in the instant matter appears to be “Mumbai”. Therefore, the
relevant market in the present case would be “distribution of bottled water
in Mumbai”.
17.
The Informant has neither provided any detail nor made any submission
regarding the dominant position of the OP. The Commission observes that
apart from Bisleri, there are several other brands of bottled water
including Coca Cola (Kinley), PepsiCo (Aquafina), Manikchand
(Oxyrich), Parle Agro (Bailley). All these players have their respective
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distribution channel which compete in the relevant market. The
information in web portals/directories such as justdial reveals that there
are large number of distributors of bottled water in Mumbai. It is also
observed that there are several distributor of Bisleri in Mumbai. Presence
of different brands of bottled water and large number of distributors
suggest that the relevant market is competitive and the consumers have
adequate choice. Thus, the OP does not appear to be dominant in the
relevant market. In the absence of dominance, the question of abuse does
not arise.
18.
It is pertinent to note that, as per the appointment letter dated 27.12.2013,
Bisleri had appointed the Informant as one of its distributor in Malad
(East) area and thus, has not made the Informant an exclusive distributor
for the same. As per the facts contained in the information, the Informant
appears to be seeking exclusivity in the distribution of bottled water of
Bisleri in the area of Malad (East) which is not pro-competitive.
19.
In light of the above analysis, the Commission is of the view that no case
of contravention of the provisions of Section 4 of the Act is made out
against the OP and no competition concern is discernible from the
information. Accordingly, the matter is closed under Section 26(2) of the
Act.
20.
The Secretary is directed to inform all concerned accordingly.
Sd/(Devender Kumar Sikri)
Chairperson
Sd/(S .L. Bunker)
Member
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Sd/(Sudhir Mital)
Member
Sd/(U. C. Nahta)
Member
Sd/(Augustine Peter)
Member
Sd/(Dr. M. S. Sahoo)
Member
New Delhi
Dated: 01/ 06/2016
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