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Informist, Tuesday, Jul. 1, 2025

--CCI orders probe into anti-competition complaint against Asian Paints

--CCI: Got complaint from Grasim on Asian Paints anti-competitive acts

--Asian Paints: Currently reviewing CCI's order on Grasim's claim against co

NEW DELHI – The Competition Commission of India Tuesday issued an order asking its director general to investigate alleged anti-competitive practices by Asian Paints Ltd. in the decorative paints market. The commission said its order is based on a complaint submitted by Grasim Industries Ltd. against Asian Paints. Grasim Industries entered the paints business recently.

As per the order, in the commission's opinion, a prima facie case of breach of select clauses of the Competition Act, 2002, by Asian Paints is made out on the basis of information and material provided by Grasim Industries. The commission said in the order that Asian Paints appeared to have restrained its dealers from dealing with competitors by enforcing exclusivity upon them. This imposed unfair conditions and appeared to be exploitative conduct, according to the order.

The commission also said that on a first view, Asian Paints seemed to be creating barriers to new entrants in the decorative paints market by restraining suppliers of essential raw materials from providing goods and services to Grasim Industries. The commission said it had not heard Asian Paints before passing the order as it found no reason to do so at this stage. The director general has been told by the commission to submit the investigation report within 90 days from Tuesday.

As per the order, the material provided by Grasim Industries to support its allegation of Asian Paints enforcing de facto exclusivity upon dealers in violation of the provisions of the Competition Act, 2002, was the finding of a third-party market survey that was conducted on behalf of the Aditya Birla Group company. Grasim Industries also submitted affidavits of some of its employees in connection with the alleged anti-competitive conduct of Asian Paints.

Grasim Industries also alleged in its complaint that Asian Paints had been directing its dealers to return or not install tinting machines supplied by the complainant company. Its tinting machines are more advanced than those of Asian Paints and the latter's restrictive practices regarding these machines is hurting consumer interest in breach of the competition law, Grasim Industries further said. The commission, however, dismissed this argument and said "such averment ... cannot be confirmed at this stage from the information available on record".

The commission noted that Asian Paints holds a dominant position in the decorative paints market. Although it did not call Asian Paints for any hearing, the company filed an intimation on Jun. 5 seeking the opportunity to present its position. Asian Paints submitted to the commission that in the highly competitive Indian paints market, the decorative paints business has low barriers to entry.

Asian Paints said in its submission that no other paint company has been able to scale up in the manner that Grasim Industries has since its entry in the paints business in March 2024. Asian Paints told the commission that an equity research report by broking firm Jefferies had said the network of Grasim Industries dealers and colour tinting machines surpassed that of many long-established players.

According to the submission by Asian Paints, the rapid and substantial growth of the Aditya Birla group company's s paints operations demonstrated the absence of any anti-competitive conduct by existing players. Asian Paints further submitted to the commission that Grasim Industries can leverage its existing cement business (under UltraTech Cement) to access over 200,000 dealers nationwide and rapidly expand in the paints segment.

In a stock exchange filing following the Competition Commission of India's order, Asian Paints said it is reviewing the order and will fully cooperate with the commission during the course of the investigation.

Tuesday, shares of Asian Paints ended 1.2% higher at INR 2,369.50 on the National Stock Exchange, and shares of Grasim Industries ended 0.1% higher at INR 2,848.10.  End

Reported by Rajesh Gajra

Edited by Rajeev Pai

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