Tribunal upholds Reliance Paints verdict

The Competition Appellate Tribunal has upheld the decision of the Competition Commission of Pakistan (CCP) against M/s Reliance Paints Pakistan for fixing the retail prices of its products in violation of Section 4 of the Competition Act, 2010, stated a press statement released on Saturday.

According to the statement, the CCP initiated an inquiry after receiving a formal complaint from Akzo Nobel Pakistan Ltd, which alleged that Reliance Paints was fixing the minimum resale price for its products and also monitoring and penalising dealers, distributors, and retailers for non-compliance with its price directives. The CCP’s inquiry report concluded that these practices were restricting competition not only between dealers and retailers but also between Reliance and its competitors, as the retail price became inflexible and no discounts could be offered by dealers to consumers for Reliance’s products.

The Commission observed that the agreements and arrangements enforced by Reliance Paints restricted intra-brand competition amongst its dealers, distributors, and retailers, impairing their ability to compete on prices in the sale and distribution of Reliance Paints’ products. Consequently, the CCP imposed a penalty of Rs5 million on Reliance Paints, as stated in the release. Reliance Paints filed an appeal against the CCP’s order with the Competition Appellate Tribunal. The Tribunal upheld the findings of the Commission regarding Reliance Paints’ violations of Section 4 of the Act. However, it reduced the penalty to Rs2.5 million, according to the press release.