CUTS approaches CCI against PVR-Inox merger

Business Line, August 18, 2022

Consumer Unity & Trust Society (CUTS), on Thursday, said it has urged the Competition Commission of India (CCI) to investigate “possible anti-competitive effects” of the proposed merger between Inox Leisure Ltd and PVR Ltd on the film exhibition industry in the country

The public policy research and advocacy group said it has “filed the information” with the CCI on July 27, and is awaiting to hear from the competition watchdog.

The advocacy group said the combined entity post merger will become the largest player in the film exhibition industry in India. “PVR-Inox is likely to become the largest player in 43 cities, with market share in excess of 50 per cent in at least 19 cities, consequently substantially increasing the concentration levels,” it claimed in a statement.

The body alleged that such enhanced market power could result in “possible competition concerns”, including reduction in consumer choice and high-ticket prices. The body also raised concerns regarding the high bargaining power of the combined entity that could lead to onerous terms for film distributors, food & beverage suppliers and technical equipment suppliers.

“The CCI has a duty to prevent and eliminate practices having an appreciable adverse effect on competition, promote and sustain competition, and protect the interest of the consumers,” said Pradeep S Mehta, Secretary General, CUTS. The body also claimed that had it not been due to Covid lockdowns, the deal would not have qualified for exemption from mandatory merger review by CCI

PVR and Inox Leisure, in their BSE filings on August 3, said a joint application for the Scheme of Amalgamation has been filed “under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013, with the National Company Law Tribunal, Mumbai on August 2”. The proposed merger, which was announced in March, received clearances from BSE and NSE in June.

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