The Competition Commission of India (CCI) is continuing its active investigation into the distribution exclusivity arrangements of major legacy paint manufacturers in India. The CCI paint market antitrust probe, registered as Case No. 32/2024, examines allegations of anti-competitive dealer-locking practices, exclusivity clauses in distribution agreements, and price coordination through channel pricing structures.
The investigation has gained urgency as new entrants like Birla Opus and JSW Paints accelerate dealer recruitment and face resistance from incumbent dealer networks. Preliminary findings have reportedly noted that some incumbents approached dealers “with an attitude to restrict competition.” The next CCI hearing is expected before September 2026.
What Are the Specific Allegations in the CCI Paint Probe?
The CCI probe focuses on three categories of alleged anti-competitive conduct: first, exclusivity clauses in dealer agreements that prevent retailers from stocking competing paint brands; second, differential dealer margins tied to brand exclusivity commitments; and third, coordinated channel pricing signals that may constitute indirect price communication. The informant in Case No. 32/2024 appears to represent interests aligned with new entrants challenging the legacy distribution structure dominated by Asian Paints, Berger Paints, Kansai Nerolac, and Indigo Paints.
How Could This Probe Affect the Indian Paints Market?
If the CCI mandates open distribution frameworks — prohibiting exclusivity clauses — the market entry cost for Birla Opus and JSW Paints drops substantially. Currently, new entrants must either acquire existing dealer relationships or sign up greenfield dealers, both of which require time and capital. A CCI order requiring incumbents to allow multi-brand dealerships would accelerate competitive disruption across Tier-2 and Tier-3 cities where legacy incumbents have the deepest channel lock-in. Industry analysts estimate that dealer exclusivity is worth approximately 8–10% market share protection for incumbents in semi-urban markets.
Market Reaction and Industry Response
Asian Paints and Berger Paints have not made public statements on Case No. 32/2024. Legal experts familiar with CCI proceedings note that the commission has historically taken 18–24 months for formal orders in complex distribution cases. The Indian Paint Association has internally discussed voluntary guidelines on dealer agreements to pre-empt a regulatory mandate. Birla Opus and JSW Paints are watching the proceedings closely, as a favourable CCI order would materially reduce their distribution build-out costs.
What Happens Next?
The CCI is expected to hold its next hearing before September 2026. Depending on DG (Director General) investigation findings, the commission may issue interim directions before a final order. A final order mandating open dealerships could take effect in FY28. Companies should watch for DG report circulation, which typically precedes formal hearings by 2–3 months.
Frequently Asked Questions
What is CCI Case No. 32/2024 about?
CCI Case No. 32/2024 is an antitrust investigation into the paint market, targeting alleged anti-competitive dealer exclusivity arrangements of legacy incumbents. It examines whether major paint companies used exclusivity clauses and differential dealer margins to restrict competition from new entrants.
Which paint companies are under investigation?
The probe targets legacy incumbents in the Indian paint market. Based on public filings, Asian Paints, Berger Paints, Kansai Nerolac, and Indigo Paints are understood to be among the entities whose distribution practices are being scrutinised, though formal charges have not yet been filed.
What could the CCI order if it finds anti-competitive conduct?
The CCI can impose penalties of up to 10% of average three-year turnover, mandate structural remedies such as prohibiting exclusivity clauses in dealer agreements, and require behavioural changes in channel pricing. Repeat violations can result in higher penalties and potential personal liability for directors.
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