The Competition Commission of India has dismissed the petition filed by Manappuram Jewellers against some jewellers and an association, claiming collusion and abuse of dominant position in trade. The company claimed that certain members of the Thrissur-based Kerala Gold and Silvers Dealers association have been indulging in anti-competitive trade practices against it to ruin its reputation and reduce market competitiveness. Manappuram Jewellers is not a member of the 243-member association based in Thrissur.
MAJEWEL (Manappuram Jewellers) alleged that certain members were displaying stickers and banners inside their outlets warning that they would not accept gold jewellery sold by it due to its inferior quality and thereby tarnishing its reputation. Moreover, MAJEWEL has accused the members of the association in colluding to fix price of gold and silver jewellery sold by the member outlets.
The commission disposed the petition filed by the jewellery company saying that a case could not be made against the 243 shops, which were members of the association. Even though certain members of the association had displayed stickers or notice against the complainant, the commission could not find any role of the association in the act. The commission reports that the 243 members of the association did not have the market share to abuse their position and that the total sale of the complainant was higher than the total sales of the association members.
MAJEWEL is a public limited company established in 2008 and has nine retail outlets in South India. The company has plans to open 100 retail outlets all over India in the next five years.
When contacted by FE, Manappuram Group officials did not comment on the issue.
Meanwhile, KG Gopalan, president of the Kerala Gold and Silver Dealers Association said that the complaint was a strategy to choke small players from the field. ?Our association members are small with less than R10 lakh monthly turnover. Manappuram is trying to create problems via false advertisements claiming that it will buy its own old gold above market rate. We are not in a position to compete with them and some of our members had problems with customers wanting to sell gold purchased form Manappuram,? he said.
Approximately 300,000 traditional neighborhood jewellers commonly referred to as the unorganised sector, dominate the Indian gold sector.
According to a report of Credit Analysis & Research Limited (CARE), small players dominate the retail landscape with a 96% market share (in terms of value), while big brands or organised retail form only 4% of the overall market in FY11.