Allegations of anti-competitive conduct against Amul Dairy and National Dairy Development Board, dismissed

Competition Commission of India (CCI): “The party floating the tender is a consumer and has the right to decide on the appropriate eligibility conditions based on its requirements,” observed CCI while rejecting allegations of unfair and anti-competitive practices against Amul Dairy and the National Dairy Development Board with regard to conditions of a tender floated by Amul.

Earlier, an information was filed by Suntec Energy Systems, a partnership firm, which has been engaged in the business of manufacture, supply and distribution of high quality burners in India and is also an exclusive distributor of Riello brand burners in India, alleging that Amul under the aegis of the board floated a tender for various products for its dairy plant in Gujarat and specified only one manufacturer with the name of ‘Weishaupt’ as the preferred manufacturer under the product name ‘burner’. It was also alleged that there were other manufactures of burners with the same technical specifications available in India, including the burner manufactured by the Informant but, putting such a condition in the tender which resulted into making only one manufacturer a preferred supplier was anti-competitive and shows that there was an arrangement/ understanding between the parties to disqualify all other manufacturers/ distributors of burners which amounts to bid rigging and collusive bidding in contravention of Section 3(3)(d) of the Competition Act.

After hearing the parties, CCI noted that a procurer, as a consumer, can stipulate certain technical specifications/ conditions/ clauses in the tender document as per its requirements which by themselves cannot be deemed anti-competitive. CCI further noted that the party floating the tender is a consumer and it has the right to decide on the appropriate eligibility conditions based on its requirements as in a market economy, consumers’ choice is considered as sacrosanct and in such an economy, a consumer must be allowed to exercise its choice freely while purchasing goods and services in the market. “OP 2 (Amul Dairy) may have some specific needs while constructing the boiler in its plant and to achieve that standard/quality, it might have mentioned the name of ‘Weishaupt’ as the preferred manufacturer in the list of preferred makes of bought out items. It may also be noted from the list of ‘preferred makes of bought out items’ provided in the tender that for each product (except the burner), it has given the names of more than one preferred manufacturers, indicating that OP 2 is open to procuring from different manufacturers,” noted CCI while rejecting the allegations against Amul Dairy and closing the matter. [Suntec Energy Systems v. National Dairy Development Board, 2016 SCC OnLine CCI 78, decided on November 10, 2016]

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