Kingfisher maker United Breweries dominates India’s beer market by controlling half of it, while global player Carlsberg is the third biggest brand, just 15 years after it had entered the country. Along with Budweiser maker InBev, the two major brands control the lion’s share of the Indian beer market, and collusion between the trio gives them an unfair advantage. As new beer brands struggle to cater to a rising demand for innovative brews, the three giants came together to rig prices and implement them across Indian states.
How it unfolded
India’s competition watchdog CCI found these big three brewers guilty of forming a cartel, to use an industry body All India Brewers’ Association (AIBA), to set rates favourable to them. Last year, the CCI slapped UB and Carlsberg with a massive Rs 870 crore fine, but InBev was let go with a slap on the wrist for providing key evidence. A year later, the National Company Law Apellate Tribunal (NCLAT) has upheld the penalty against Kingfisher and Carlsberg.
Cartelisation refers to an unholy alliance of big businesses or multiple entities, to wield unfair influence over the market and control pricing as well as other policies.
State governments not involved
NCLAT also let state governments off the hook, because simply imposing taxes and fees, don’t make them complicit in unfair trade practices of the corporations. The companies had filed an appeal to reduce the amount of the penalty against them, which the NCLAT took as an admission of guilt. Since they were agreeing to pay a fine for cartelisation, the appellate tribunal refused to provide any relief to Kingfisher and Carlsberg.
Out of the Rs 870 crore fine, United Breweries will pay a hefty Rs 752 crore, while Carlsberg is hit by a Rs 120 crore penalty.
