Competition watchdog trains guns on 11 condom makers

Investigation finds condom cos may have colluded to overcharge govt by rigging bids.

NEW DELHI: State-owned HLL Lifecare, TTK Protective Devices Ltd and other leading condom manufacturers have found themselves in the crosshairs of the antitrust watchdog. A probe by the Competition Commission of India (CCI) has found that 11 condom makers may have colluded to overcharge the government by rigging bids between 2010 and 2014, said an official aware of the development.

“There was communication between these companies at director level, CEO level and operational head level to pre-decide prices,” said the official, citing a report by the CCI director general. The CCI’s investigation arm concluded that the 11 companies schemed to submit noncompetitive bids for a government tender to purchase condoms.

“It’s a bid-rigging case,” the official said. “They quoted high bids after colluding. Some of the bids are matched to the nearest paisa and most bids are within 50 paisa of the lowest bid range per box.”


The official added that such situations often lead to the government asking manufacturers with offers close to the lowest to match the winning bidder so they also get orders under the tender.

The companies under investigation include HLL Lifecare (formerly Hindustan Latex), TTK Protective Devices, Suretex Prophylactics (India) Ltd, Anondita Healthcare, Cupid Ltd, Mercator Healthcare Ltd, Convex Latex Pvt. Ltd, JK Ansell Ltd, Universal Prophylactics Pvt. Ltd, Indus Medicare Ltd and Hevea Fine Products Pvt. Ltd.

Public sector undertaking HLL Lifecare manufactures Moods condoms, TTK Protective Devices makes Skore condoms, JK Ansell sells the Kamasutra brand of condoms and BSE-listed Cupid has an eponymous brand.
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A representative of Anondita Healthcare said the company had complied with all requests for information from the CCI.

The Penalty
The person said the company was too small a player to influence or collude with larger manufacturers and had not supplied any condoms to the government during the period in question.

ET was not able to contact Mercator Healthcare for comment. The other companies did not respond to ET's queries. The ministry of health and family welfare was engaged in large-scale procurement of condoms until 2014 for distribution for free or at subsidised rates to various organisations, which would then give them out to the public.

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This role was then taken over by the Central Medical Services Society. Manufacturers found to be colluding in price fixing could be fined up to three times their profits for each year that such an agreement was in place or 10% of the average turnover for the period, whichever is higher.
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