August 18, 2022
To access Information filed by CUTS against PVR and Inox to CCI, click here–>>
Consumer Unity & Trust Society (CUTS), a public policy research and advocacy group, has filed an information with the Competition Commission of India (CCI), urging it to investigate possible anti-competitive effects of proposed merger agreement between Inox Leisure Limited (Inox) and PVR Limited (PVR), on the film exhibition industry.
Currently, PVR is the largest film exhibition player in India, followed by Inox. As per their press release dated 27 March 2022, after the merger, the combined entity, PVR-Inox, will become the largest player in the film exhibition industry in India.
This will eventually lead to them having a significant combined market share in most cities in India. PVR-Inox is likely to become the largest player in 43 cities, with market share in excess of 50 percent in at least 19 cities, consequently substantially increasing the concentration levels.
Such enhanced market power will result in possible competition concerns including:
- reduction in consumer choice i.e., consumers will have no effective option but to visit the multiplexes of PVR-Inox.
- high-ticket prices, and a possible deterioration in food and service quality.
- high bargaining power of PVR-Inox will likely lead to onerous terms for distributors, food & beverage suppliers, technical equipment suppliers etc.
“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.
Had it not been due to COVID-19 lockdowns, the PVR-Inox deal would not have qualified for exemption from mandatory merger review by CCI. In light of high likelihood of adverse effect on consumers, CUTS has approached the CCI to investigate the matter. The information was filed on 27 July 2022 and CUTS awaits to hear from the CCI.
Notably, in the last 12 years, the film exhibition industry has witnessed gradual consolidation as a result of several merger and acquisitions, thereby bringing down the total number of major players from 11 in 2009-2010 to only 5 namely, PVR, Inox, Carnival Cinemas, Cinepolis and Miraj Cinemas in 2022.
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For further details, contact:
Mr Vijay Singh; vs1@cuts.org; 99102-64084
Mr Ujjwal Kumar; ujk@cuts.org; 9199030799