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CCI dealer-exclusivity probe

Policy & Regulation · Sector rules & licensing

What it is

A Competition Commission of India investigation into whether the dominant paint manufacturer used exclusivity arrangements, incentives and pressure on dealers to prevent them from stocking competing brands

It goes to the heart of how the industry's distribution moat is built

Impact on industries

  • The dealer network is the incumbent's principal barrier to entry, so an adverse finding would weaken the structural advantage more than any competitor could
  • For new entrants it is potentially decisive - shelf access has been the binding constraint on challenging established brands
  • Regulatory overhang creates uncertainty in commercial arrangements while the matter is unresolved
  • Even an adverse ruling changes dealer contracts rather than consumer preference, so brand strength and tinting-machine installed bases remain

Industries affected