Is there a cartel working together to fix prices of synthetic fibers? The Competition Commission of India (CCI) seems to believe so. Their impression is that some prominent fiber makers may have colluded to fix prices for synthetic fibers even though
the companies in question firmly deny the charge. In fact, the CCI has initiated a DG level investigation to check if top polyester and viscose fiber companies behaved as a cartel to fix prices. It may be noted that both are synthetic fibers used in the apparel business. According to CCI sources, they have taken a prima facie view on possible cartelization by some 8-10 textile fiber and yarn manufacturers, which include some big players. The CCI feels perhaps these companies had colluded on deciding who would sell to whom and at what price.
Of
course, all the companies under the scanner have denied the charge. A senior executive from one of the companies has pointed they are all in different segments, their products are different and so are their customers, so they cannot collude to fix prices. For instance, while one of them is in the viscose filament yarn (business), another is in viscose staple fiber the third is in the business of polyester fiber and yarn and so on. Moreover, their supplies depend on the needs and specifications of customers. Therefore, what they chose to buy and from whom depends on the needs. In fact, a particular buyer divides his requirements among various suppliers.
Meanwhile, if the investigations reveal that these companies have indeed behaved as a cartel, the CCI can impose penalties on them. CCI’s investigation is based on a complaint admitted by it in June. It had said that these big companies are dictating terms because of which smaller textile manufacturers are suffering. The commission investigated the complaint and found sufficient evidence to ask its DG to investigate the case.
