1. Consequent upon the repeal of the MRTP Act this complaint has been received by transfer on 04.03.2010 from the office of DGIR, MRTP Commission under section 66(6) of the Competition Act, 2002.

2. The facts as stated in the complaint, in brief, are: -

2.1 This complaint was filed by the All India Distillers' Association against glass bottle manufacturers in India alleging restrictive and monopolistic trade practices being adopted by the four major manufacturers namely: Haldyn Glass Gujarat Ltd., Hindustan National Glass & Industries, AGI Glasspac & Mohan Crystal Glass Work who together control 90% of the glass bottle market.

2.2 It has been stated that Potable Alcohol Industry of India comprises of Indian Made Foreign Liquor (IMFL), Country Liquor, Beer and Wine. The packaging material for the potable alcohol is primarily glass bottles. The glass bottles are used because these ensure longer shelf life, prevent alcohol from evaporation, retain taste, color and aroma intact even after the opening of bottles. Other packaging materials like PVC, pet bottles, metal containers etc. do not have wide-acceptance in the market. The glass bottles are essential for distribution and marketing of potable alcohol. The cost of the glass bottles is a major component in the costing of alcoholic beverage ranging from 6% to 35% of the cost of potable liquor. The Bureau of Indian Standards has prescribed the standard for manufacturing of glass bottles and because of this reason there is homogeneity of the product 'glass bottle'.

2.3 As per averments made in the complaint the glass bottle manufacturing companies have recently threatened to increase the price of glass bottles by at least 20% on the ground that the cost of some of the inputs has gone up namely Soda Ash by 57%, liquid petroleum gas by 14%, and furnace oil by 48% though in fact the extent of increase in the price of these inputs is not as much as is being portrayed. Moreover, there appears to be no increase in the prices of various other main ingredients such as cullet, silica, calcite and host of chemicals. Thus, the impact of increase in cost is much less than that of the 20% by which the price of glass bottles is being threatened to be increased.

2.4 It has also been stated that the glass bottles manufacturers have in the past increased the prices of glass bottles to about the same extent and at the same time e.g. prices were hiked by 10% simultaneously in February, 2007, again by 10% in December, 2007 and now again there is a threat that they will increase price by 20% simultaneously. Thus, these glass bottles manufacturers have been emboldened as their past conduct has remained undetected and unpunished.

2.5 The complainant has alleged that the uniformity in percentage price increase being sought is unjustified given the difference in variable cost of each glass manufacturer in view of the fact that some glass bottle manufacturer use gas while others use furnace oil, obvious difference in plant efficiency due to their differential age and wide variation in labour cost and transport component.

2.6 It has been further alleged that in view of the unique market structure of the industry, homogeneity of the product, lack of substitutable product, absence of competitive pressure of import, capital intensive industry, low technical advancement, strong ability to exchange information of price and other terms amongst the glass bottle manufacturers and tamed countervailing buyer's power, the glass bottles manufacturers in India are indulging in restrictive trade practice of cartelisation with impunity.

2.7 In order to ensure price increase immediately, glass bottle manufacturers are increasingly refusing to honour their pending commitment to supply under one pretext or the other and there is a serious threat that future supplies would be stopped sooner than later unless the unjustified and unlawful demand for a price increase by the cartel of glass bottle manufactures is met by the potable a