Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

On the price of beer and bread

with 5 comments

In his post earlier today Nicolas  was whining wrote about the price of beer in Belgian supermarkets (the fact that he complains about the price of beer when he had never complained about actually cartelized products -such as endives- reveals a typical single-man’s pattern of consumption).

Anyway, he fails to see that things could be worse. Below you can see a pic of a beer taken in India a few days ago. The label features (i) an “MRP” or “minimum resale price” ; and (ii) a prohibition to sell the beer in any place other than the Goa area. That’s a possible infringement combo right there!

[P.S: Following the publication of this post our Indian readers have clarified that the M in MRP in reality stands for “maximum” not “minimum”, and that there is an explanation for the market partitioning clause].

Want more? Take a close look at this news:  The All Goa Association of Bakers decides to increase the price of bread.

[P.S. Our Indian readers have confirmed that in this case there is no explanation other than price-fixing].

Good luck to our readers from India, who are making a great effort in fostering a culture of compliance in their country  (way to go!).  The CCI has earned a reputation for investigating Tacit Cartels, but apparently it won’t run out of explicit ones any time soon.

(Thanks to Christian Bulzomi -also the person half-responsible for this– for the great pics!)

Written by Alfonso Lamadrid

5 October 2012 at 12:01 am

5 Responses

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  1. I know this is a peculiar situation, but this can be explained in the sense that in 1 state in India liquor is banned and selling it is illegal with serious jail time attached to it. so my question to the competition authorities in india would be directed at how would competition law fare with public policy.

    Pranav Mody

    5 October 2012 at 1:37 pm

    • This could be a good explanation but, as far as I understand, alcohol is not prohibited in Maharashtra. I had plenty of beer there 🙂 and it did not look to be a below the counter thing. There must be a different explanation.

      Christian

      8 October 2012 at 5:37 pm

  2. There seems to be a leeeetle misuderstanding.

    M.R.P in India means MAximum retail price ( the maximum any retailer can demand from the end consumer)

    and the for sale in Goa only, is a result of excise tax jurisdictions.. each state in India levies excise on alcohol products separately. the excise duty significantly alters price.. ( Goa has among the lowest duty!.. HOoray! ) hence once the duty is paid to one state.. that product cannot be sold in another state, say with higher duty ( welcome to Maharashtra)

    The bread is of course blatant price-fixing..

    Samith , India

    5 October 2012 at 3:01 pm

    • Your explanation about the M.R.P. makes perfectly sense. What does not make sense is the reason why they always charged me a higher price than the M.R.P. 😦
      As to the excise duties, I would say that at first glance it does not seem like a good reason to partition the market. Given the fact that the information concerning the prohibition is printed on the label, the excise duty appears to be levied at a very early stage (production). I think it would make sense to levy the excise duty at a later stage or foresee a system according to which it would be possible to request reimbursement of the excise duty paid in the state in which the beer was produced and pay the excise duty in the state in which the beer is being exported. But, of course, I am no expert in Indian law and am thus probably missing some fundamental elements here.

      Christian

      8 October 2012 at 6:04 pm

  3. Two beers in one Euro!!! What better can one get 😉

    Pranav Mehra

    5 October 2012 at 9:31 pm


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