June 14, 2012
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Anticompetitive trade margin fixing restrained discounts and distribution, prompting directives to remove restrictive supply and appointment clauses.
The Competition Commission found the Chemist & Druggist Association, Goa violated the Competition Act by prescribing guidelines that fixed trade margins, capped wholesaler discounts and prohibited retailer discounts, thereby determining sale prices. It also restricted market access via mandatory PIS approvals, required no-objection certificates for stockist appointments, limited stockist numbers, and mandated routing of government and hospital supply bids through authorized stockists. The Commission directed cessation of these practices, removal of the offending clauses from circulars, MoUs and guidelines, filing of an undertaking within the prescribed time, and imposed a monetary penalty.