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CCI levies penalty of Rs 1 crore on Mandi Parishad for monopolising Dennis Whiske

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By Arun Pratap Singh
Dehradun, 5 Apr: Competition Commission of India has levied a hefty penalty of Rs 1 crore on Uttarakhand Mandi Parishad for its role in monopolising sale of a particular brand of liquor called Dennis in the state ignoring the public demand for other brands and thus causing direct business losses to various liquor manufacturers. This happened during the rule of the then Chief Minister Harish Rawat.
It may be recalled that this incident was much in news during the rule of Harish Rawat. The general perception was that some powerful people at the top of the then government had a personal stake in the Dennis Brand of whiskey and beer and under their pressure the procurement agencies were not procuring liquor for sale in the state from various manufactures despite a heavy public demand for them. It may further be recalled that Mandi Parishad had been designated as the major procurement agency by the then government for IMFL along with the GMVN and KMVN. As the Mandi Parishad was not procuring liquor of other major manufacturers and only procuring Dennis Brand particularly for supply in the hills, the business of various leading liquor manufactures was adversely affected to a severe extent. Consequently, some manufacturers including the International Spirits and Wines Wine Association of India, which has members from leading companies like Radico, Bacardi, US Spirits filed a case with the Competition Commission of India in 2016. It was alleged that, as a consequence of deliberate action to promote just one particular band, a monopoly had been vested in the aforementioned brand making it dominant in the relevant market for procurement, supply and distribution of alcoholic beverages in the State of Uttarakhand.
The Commission in its order observed that the Additional Excise Commissioner (Licensing), Uttarakhand had failed to provide the minimum stock of IMFL, which was to be maintained in the warehouses of FL-2 licensees. The High Court of Uttarakhand vide its judgement dated 23 December, 2015 had directed the Additional Excise Commissioner (Licensing) and the District Collector of the different districts to ascertain and communicate the minimum stock of IMFL, on the basis of the consumer demand and order placed by the retailers, which was to be maintained at all times in the FL-2 licensees’ warehouses. In pursuance to the order of the High Court of Uttarakhand, the Additional Excise Commissioner (Licensing), vide order dated 31 December 2015 directed Mandi Parishad to maintain monthly minimum stocks of each brand of IMFL based on 15 per cent increase in the quantity of sale of each brand of IMFL during the FY 2014-15. In this context, Mandi Parishad submitted before the DG that Additional Excise Commissioner (Licensing) was supposed to fix minimum stock requirement for the Mandi Parishad while the collectors for the respective districts were supposed to fix the minimum stock requirement of GMVN and KMVN. Based on the submissions of Mandi Parishad and the Additional Excise Commissioner (Licensing), it was found that Mandi Parishad did not follow the directions of the Additional Excise Commissioner and the High Court. Hence, the penalty has been levied.