National Company Law Appellate Tribunal (NCLAT) on Friday upheld a Competition Commission of India (CCI) order imposing a penalty of ₹870 crore upon beer companies — United Breweries and Carlsberg—for cartelisation. 

“We do not find merit in either of the appeals and all the appeals are dismissed,” noted NCLAT Bench comprising Justice Rakesh Kumar, Member (Judicial) and Ashok Kumar Mishra, Member (Technical) in its 81 page ruling while dismissing the appeals filed by the companies and their individuals.

Gopal Subramaniam, Senior Advocate, represented United Breweries, while CCI was represented by Senior Advocate Manish Vashisht.

Cartelisation issue

In September 2021, CCI passed a final order against three beer companies namely United Breweries Limited (‘UBL’), SABMiller India Limited (now renamed as Anheuser Busch InBev India Ltd. after being acquired by Anheuser Busch InBev SA/NV) (‘AB InBev’) and Carlsberg India Private Limited (‘CIPL’) for indulging in cartelisation in the sale and supply of beer in various States and Union Territories, including through the platform of All India Brewers’ Association (‘AIBA’). 

As AIBA was found to be actively involved in facilitating such cartelisation, CCI also held AIBA to be in contravention of the provisions of Competition Act, 2002 apart from the beer companies. All the three beer companies were lesser penalty applicants before CCI. 

Based on evidences of regular communications between the parties collected by the DG during search and seizure, and on the basis of the disclosures made in the lesser penalty applications, CCI found that the three companies engaged in price co-ordination in contravention of the provisions of Section 3(3)(a) of the Competition Act, 2002 in collectively restricting supply of beer in Maharashtra, Odisha and West Bengal in contravention of the provisions of Section 3(3)(b) of the Act, and in sharing of market. 

CCI also found co-ordination between UBL and AB InBev with respect to purchase of second-hand bottles. Further, 4 individuals of UBL, 4 individuals of AB InBev, 6 individuals of CIPL and the Director General of AIBA, were held by CCI to be liable for the anti-competitive conduct of their respective companies/ association, in terms of Section 48 of the Act. 

Lesser penalty

Giving benefit of reduction in penalty under the provisions of Section 46 of the Act of 100 per cent to AB InBev and its individuals, 40 per cent to UBL and its individuals and 20 percent to CIPL and its individuals, CCI directed UBL and CIPL to pay penalties to the tune of ₹750 crore and ₹ 120 crore, respectively, besides passing a cease-and-desist order. 

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