By Aditya Kalra and Abhirup Roy
NEW DELHI (Reuters) - India's antitrust watchdog on Wednesday raided the offices of Associated Alcohols & Breweries and Som Distilleries as part of an investigation into alleged price fixing in liquor products, two sources with direct knowledge of the matter said.
The Competition Commission of India (CCI) officials were conducting search and seizure operations across several cities in a case about the companies allegedly violating anti-trust laws by colluding on prices while seeking necessary regulatory approvals from states, the sources added.
The investigation is looking at price fixing of so-called country liquor, or low-priced locally made alcohol, the sources added.
India has strict regulations for the alcohol sector. Most states individually regulate alcohol pricing and the companies need to submit and get prices approved every year by the local authorities.
Without directly commenting on the raids, a spokesperson for Som Distilleries said liquor prices were fixed by government officials and the company has no say over them.
"We are not the authority to fix the price ... This is a fully government controlled business," the spokesperson said in an email to Reuters.
The CCI did not respond to a request for comment, while e-mails and phone calls to Associated Alcohols went unanswered.
After Reuters published details of the raid, shares in Associated Alcohols fell around 3% but later recouped their losses.
Further details of the case and the raids were not available from the CCI as the agency typically does not make public information on its investigations.
Associated's website says it is the leading supplier of liquor to the government of Madhya Pradesh for sales in the state. SOM Group, which includes Som Distilleries, has a portfolio of brands that includes spirits and beer products.
Wednesday's raids come just weeks after the CCI imposed a penalty of $102 million on beer giant United Breweries and $16 million on Carlsberg India in a price collusion case. Those companies were raided in 2018 as part of an investigation.
In September the CCI raided local offices of several vegetable seed companies including a unit of Germany's BASF in a case of alleged price collusion.
During such surprise raids, company documents and computer hardware are seized, while executives are questioned about their practices. An investigation could take several months to complete.
(Reporting by Aditya Kalra in New Delhi; Editing by Sanjeev Miglani, Christian Schmollinger and Emelia Sithole-Matarise)