CCI blocks B2B platform Udaan's plea to procure Parle-G biscuits directly

Competition Commission of India (CCI) has dropped the appeal of business-to-business (B2B) ecommerce platform, Udaan, which wanted to procure biscuits from Parle Products directly.

The antitrust body stated — in its order of July 6 — that Udaan has not been able to demonstrate any exclusionary practice on behalf of Parle, which may hinder the development of a competing supply chain for the products of Parle.

“The commission does not find any abuse, more so as the informant (Udaan) has failed to establish any right on its part,” CCI said in its order.  

Udaan had gone to CCI in 2021 after Parle Products refused to sell its products directly to the platform. It said in its submissions to the regulator that Parle-G biscuit falls in the category of “must have” stock for distributors and retailers.

It also said Parle-G has a high brand loyalty and the consumer would more likely look at alternative avenues to buy the glucose biscuit. Udaan added that if it is not given access to the market adequately in the same terms as its competitors, it may have to exit the market altogether.

Udaan also said it would be forced to procure Parle products from the biscuit major’s existing distributor network. And, retailers may shift from the Udaan platform and align with traditional distributors in order to avoid dealing with multiple suppliers.

It also said that Parle derives majority of its revenue from Parle-G. It had a share of 83 per cent in the glucose biscuits market in India for FY20.

In FY20, the glucose biscuit market size in India was Rs 5,444 crore where Parle was dominating the market, and the next player had a meagre share of 10.4 per cent. Udaan declined to comment on CCI’s order.

The maker of Hide & Seek biscuits also said in its submissions that Udaan is “misconceived and it does not raise any competition relation issue.”

“The information filed is unnecessarily repetitive and prolix and appears to have been drafted in the manner as if there are competition issues when none exists,” Parle told CCI.