Cartel in Indian dairy sector? Watchdog may investigate
An official at a department that works closely with the Competition Commission of India (CCI) told FoodNavigator-Asia that the watchdog is considering conducting an enquiry into the recent hikes in the price of milk.
Under Indian law, cartels are a violation of Section 3 of the Competition Act 2002 which pertains to anti-competitive agreements between companies; in this case, the regulator is eager to know if there is one amongst milk producers.
“The issue here is the constant and concurrent hikes in the price of milk by the major producers. The regulator wants to investigate if there is some sort of anti-competition behavior there,” said the official on the condition of anonymity.
Milk producers have raised prices by 35% over the past year, which is presumably the catalyst behind the regulator studying data to ascertain whether a case for a cartel can be made in this case.
To give an example, the price of full cream milk in India stands at 38 rupees to date, which is 26% higher than the 30 rupees it cost in March 2010.
FoodNavigator-Asia contacted major milk producers, including R S Sodhi, the managing director of the Gujarat Cooperative Milk Marketing Federation, and Amul, the biggest dairy player in India for their comments on the issue.
However, they did not respond ahead of publication.
Local media, however, have reported many dairy players as saying that the price rise is because of increasing procurement costs.