The All India Tyre Dealers Federation (AITDF) had filed a case before the Ministry of Corporate Affairs in 2007 alleging cartelisation by manufacturers. The Ministry referred the case to the Monopolies and Restrictive Trade Practices Commission (MRTPC) and later to the Competition Commission of India (CCI). The tyre manufacturers specifically include five major domestic tyre makers - Apollo Tyres, MRF, Ceat Tyre, Birla Tyre and JK Tyre.
Cartelisation generally adversely impacts overall competition in the market and is prohibited under Section 3 of the Competition Act, 2002.
The AITDF wrote to the CCI complaining that the domestic tyre companies raised prices when the prices of natural rubber went up but had not reduced the prices when the rubber prices came down. Since the tyre companies have all stuck to this pricing strategy, it is oligopolistic and anti-competitive, the AITDF said in its letter to the CCI. It urged the CCI to take suo motu action on the matter as it is an anti-competitve practice.
Responding to the letter, the CCI asked AITDF to explain its case in front of it, and the AITDF has decided that its "representative will appear before the Commission on February 18, 2014," said a statement from the Federation.
Tyre majors decided to raise prices when the natural rubber price curve moved up sharply last year. However, rubber prices have been on a southward trend since then, down to Rs. 151/kg from the previous peak price of Rs. 240/kg. This forced the dealers demand a cut in tyre prices.
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