CCI orders probe into Asian Paints over alleged abuse of dominance 

The Competition Commission of India (CCI) has directed its Director General (DG) to investigate allegations against Asian Paints for allegedly abusing its dominant position in the Indian paint industry, media networks have reported. 

The probe has been initiated following a complaint filed by Grasim Industries, which recently entered the paints sector under the Birla Opus Paints brand.

Grasim has alleged that Asian Paints imposed restrictive clauses in its agreements with distributors, thereby discouraging them from dealing with rival brands like Birla Paints. Media reports further highlight that dealers entering into exclusive arrangements with Asian Paints were allegedly offered incentives such as special discounts and sponsored foreign trips. In contrast, those stocking both Asian and Birla Paints reportedly faced punitive actions such as reduced credit limits, increased sales targets and fewer consumer leads.

Citing the official order dated July 1, reports state that the CCI, led by Chairperson Ravneet Kaur, observed prima facie evidence that Asian Paints may be impeding access to key supply chain players such as suppliers of raw materials, warehouse landlords, C&F agents and transporters. The Commission noted that such conduct could potentially result in input foreclosure and denial of market access to competitors like Birla Paints, which may be in violation of Section 4(2)(c) of the Competition Act, 2002.

As per media coverage of the complaint, Birla Paints also pointed to an incident from October 2023, when Asian Paints held a vendor meet at ITC Maratha in Mumbai. The event was reportedly attended by over 150 of its top suppliers. The complainant claimed this meeting was an attempt to reinforce loyalty and discourage vendors from working with competing brands.

According to data cited in media reports from the Centre for Monitoring Indian Economy (CMIE), Asian Paints held a market-leading share of 39.05 percent in FY23. Berger Paints was the second-largest player with 12.13 percent, followed by Kansai Nerolac and Akzo Nobel India with market shares of less than 10 percent each.

The CCI’s investigation, as reported, will assess whether Asian Paints’ conduct amounts to anti-competitive practices under Indian competition law.