Calling for prior appointment NOC from stockists by pharma company is anti-competitive practice: CCI
Published: Nov 01, 2017
By TIOLCORPLAW News Service
NEW DELHI, NOV 01, 2017: THE Competition Commission of India (CCI) has found the All Kerala Chemist and Druggist Association (AKCDA) and its District Units at Thrissur and Kasargod to be in contravention of the provisions of the Competition Act, 2002 for indulging in unfair business practices. The AKCDA and its District Units at Thrissur and Kasargod have been indulging in the practice of NOC prior to the appointment of stockists by pharmaceutical companies, which was limiting and controlling the supply of drugs in the State of Kerala. Further, the CCI has also found office bearers of AKCDA and its District Units at Thrissur and Kasargod responsible under Section 48 of the Act, for their involvement in the anti-competitive practice.
Accordingly, AKCDA, its District Units at Thrissur and Kasargod, and their office bearers have been directed to 'cease and desist' from indulging in the practice of insisting NOC prior to stockist appointment. Further, the CCI has slapped a monetary penalty of Rs. 4.79 lakh on AKCDA calculated @10 % of the average income of AKCDA. Penalties of Rs. 59,434/- and Rs. 53,889/-, calculated at the rate of 10% of their average income, were also imposed upon Thrissur and Kasargod District Unit of AKCDA, respectively. In addition, monetary penalties were imposed on the office bearers of AKCDA and its District units at Thrissur and Kasargod, at the rate of 10% of their respective incomes.
Following a detailed probe, the Commission found that AKCDA and its District Units at Thrissur and Kasargod were indulged in the anti-competitive practice of insisting NOC prior to the appointment of new stockists by pharmaceutical companies. This case once again highlights the persistent attempts of anti-competitive conduct by Chemist & Druggist Associations who, despite various orders by the Commission in similar cases and wide publicity through a press notice issued by the Commission with respect to the NOC practice, have not abstained from indulging in such anti-competitive conduct. The Commission found that with a view to hide their apparent anti-competitive behaviour, these associations were insisting the NOC requirement through different nomenclatures.
The detailed order can be seen at the Commission's website.
