Pandemic Aftermath: Informal Cartelization Among Trade

Cartelisation among manufacturers is a known fact. OPEC is the biggest global example. Close to home the Competition Commission Of India, which came down heavily on cement companies sometimes back, has now set its sights on the domestic steel companies. It is believed that the steel companies have increased their prices in unison in the last few months. But, recent developments in the distribution trade in Mumbai – liquor and paper – are quite an eye-opener. With businesses shuttered for nearly a year, those running hotels & restaurants, printing presses, and paper distribution have been hit by severe liquidity crunch. Most of them have not been able to pay their vendors, suppliers, or staff. After the Lockdown was lifted, the restaurant owners, printers and media houses placed fresh orders with their respective distributors. But they were told to clear some of the backlog. Irked, some of these businessmen tried tapping new distributors but they were surprised to learn that the liquor and paper trade had a list of outstanding of different businesses or credit information of bad borrowers. The distributors felt if they supply today their fellow traders would lose. So they decided to unite. It is proving to be a win-win for all.