CCI dismisses United Breweries' complaint against excise dept of Delhi

Fair trade regulator CCI dismissed a complaint filed by United Breweries Ltd against the excise department of the Delhi government with regards to conditions imposed on liquor licence. Vijay Mallya is a majority stakeholder in United Breweries Ltd.

The Competition Commission of India (CCI) disposed of the complaint saying the department, in discharge of its statutory functions falls within the realm of public policy and cannot be considered an "enterprise" for investigation under relevant provisions of the Competition Act. The firm in its complaint stated that each year under excise policy by the Government of NCT of Delhi, the department grants L-1 licence to eligible manufacturers for wholesale supply of various categories of Indian Made Foreign Liquor (IMFL).

United Breweries alleged that conditions imposed by the excise department on L-1 licensees were "unfair and discriminatory". According to the complaint, the firm alleged that "terms and conditions are rarely revised with the changing economic landscape and increasing costs and there is insufficient provisioning for inward freight, transportation and handling charges."

It further alleged that Indian manufacturer with facilities in India is not permitted to appoint an agent for the distribution of beer within the country while a foreign beer manufacturer is permitted to do so. Among other allegations, the firm also said there exists "arbitrarily set license fee without ceiling on beer brands compared to other IMFL."

The firm in its complaint alleged that the conduct of the excise department amounts to contravention of Sections 3(4)(e) and 4(2) of the Act. Section 3 and 4 of the Competition Act pertain to anti-competitive agreements and abuse of dominant market position, respectively.

However, the CCI noted that "impugned conduct of the OP in the course of grant of license in discharge of its statutory functions falls within the realm of public policy" and it does not fall within the ambit of an "enterprise". OP here refers to excise department of the Delhi government.

Besides, the Commission also noted that the department is not involved in production, storage, distribution or sale of beer and thus the possibility of examination under relevant provisions of Section 3 of the Act is also "ruled out." Accordingly, the CCI in its order dated August 2 said "no case of contravention of the provisions of Sections 3(4) and 4 of the Act is made out against the OP." PTI SRS HRS