Udaan, a business-to-business e-commerce startup, has filed a grievance with the Competition Commission of India (CCI). Against India’ largest biscuit maker, Parle Products. In its complaint, Udaan claims that Parle may be abusing its dominant position by refusing to provide its fast-moving merchandise on to the Bengaluru-based company for no reason. Parle is a dominant player within the marketplace for aldohexose biscuits in India. Its Parle-G biscuit is a ‘must-stock’ item for tiny and medium retailers and for platforms akin to Udaan.
Udaan has aforementioned it’s relegated to buying Parle products from the open market, inflicting a competitive disadvantage, compared to different existing distributors of Parle, who might directly procure biscuits from Parle. This leads to decreasing fight and increasing input prices for Udaan, and consequently, the little retailers who procure merchandise from Udaan. Parle’s continuing refusal to provide Parle-G stock-keeping units to Udaan makes it a transparent case of refusal to deal and is an abuse of dominance beneath Section 4(2) of the Competition Act, explicit the complaint.
AN email question to Parle remained unrequited until the time of getting to press. A voice for Udaan declined to discuss the development. within the complaint, Udaan has alleged that the selective course of agreement of Parle with elite distributors and denial to subsume Udaan directly and forcing it to shop for merchandise from Parle’s distributors in the open market may be a case of ‘constructive refusal to deal’ and anti-competitive in terms of Section 3(4) of the Competition Act, having considerable adverse result on competition in India.
Udaan has alleged it tried to have interaction with Parle for the last twenty four months to figure this come in a “fair and justified” manner, however Parle has continuing to discriminate. Recently, CCI obligatory a fine of Rs two hundred large integer on the country’s biggest manufacturing business Maruti Suzuki Republic of India (MSIL) for anti-competitive practices regarding however it forced dealers to discount cars. The CCI order in August contained extracts of many emails changed between dealers and Maruti executives, that created it “evident that the discount management policy was controlled” by MSIL and not its dealers.
Udaan’s sturdy provide-chain network within the fast-moving trade goods sector contains a coverage of fifty cities. the supply network spans over 900 cities, covering over 12,000 pincodes. The firm has aforementioned it not solely ensures timely delivery, however additionally provides quality and recent merchandise to consumers at way better|a much better|a higher|a stronger|a more robust|an improved} price. Traditionally, wholesalers are the foremost profitable players within the market ecosystem. Retailers would build terribly less margins, whereas wholesalers would fancy far higher returns on capital. By introducing efficiencies into the market through digital transformation, Udaan has aforementioned it’s created level enjoying field.
within the grievance before CCI, Udaan has said that Parle is dominant in the marketplace for aldohexose biscuits in India, with a market share of a staggering eighty three per cent in the relevant market of glucose biscuits in India.
Parle produces a spread of over a hundred and fifty merchandise and has with success established thirty six industry-leading completes. it’s additionally extended its presence on the far side Indian shores, marketing across more than twenty one export destinations round the world. Among all the marketed biscuit brands of Parle, its aldohexose biscuit giving Parle-G contributes more than 50 per cent to its total turnover, that also happens to be the largest-selling biscuit brand within the world.
Despite Udaan’s consistent efforts to urge Parle to subsume Udaan in honestness and on terms on a par with general market practices, Udaan has been unable to secure honest treatment and parity from Parle.
All this while, Udaan has alleged that Parle has been directly managing different distributors thought of Udaan’s competitors for Parle merchandise.
Udaan has argued that existing retailers would be forced to acquire Parle products from the incumbent distributor network of Parle. Such retailers may altogether shift from the Udaan platform. they will align with ancient distributors for the relevant market to avoid dealing with multiple upstream suppliers.
“Therefore, if Udaan isn’t given access to the aforementioned market on identical terms as its competitors, Udaan may got to exit this market altogether,” it aforementioned within the complaint, adding, “This implies that Udaan can stay foreclosed from over 83-85 per cent of the relevant market.