COMPAT Sets Aside CCI Order Penalizing Jute Mills Association For Alleged Cartelization For Packaging Material For Sugar, Etc.

COMPAT by its order dated July 1, 2016 has over-ruled the order of CCI wherein the Indian Jute Mils Association (IJMA) and Gunny Trade Association (GTA) were penalized for alleged cartelization in pricing of jute bags. It was alleged that the jute manufacturers have acquired a monopoly position as a result of the circular of the Government under the Jute Price Maintenance Act, 1987 that 100% sugar to be produced by the sugar factories is to be mandatorily packaged in the jute bags(A-Twill type). Taking advantage of this monopoly, the jute mills have unreasonably hiked the prices of jute bags from INR 53.50/bag in April 2010 to INR 64.50/bag in February 2011. It was alleged that this increase was possible only because of an agreement/understanding among all the members of the IJMA and GTA, who were quite conscious of the fact that they enjoy complete monopoly. Thus, it was alleged that, IJMA/GTA have cartelized the market for packaging material for sugar thereby