Case Study on Monopolistic & Restrictive Trade Practises

Onjus - Squeezed Out Onjus is to atomic number 6% product drinks what Cadburys is to chocolates and Fevicol to adhesives. In May 1997, Onjus, a 100% orange juice was launched by Enkay Texofood Ltd. (ETL)1 in the niche trade of fruit juices and virtually created a new product category. By 1999, Onjus gained a 19% share (Refer Table II) in the tetra-pack fruit beverages securities industry (Refer Exhibits I and II). However, the success of Onjus seemed to be short lived. In 1999, the Director General of Investigation and Registration (DGIR)2 lodged a charge with the Monopolies and Restrictive Trade Practices Commission (MRTPC),3 against Onjus being sold as a natural fruit juice. As a result, Onjus was non sold in the market for sometime. Meanwhile, the competition in the market had heightened with the launch of PepsiCos Tropicana. Further, ETLs textile division, which was making losses4 (Refer Table I), owed around Rs.870 billion to Financial Institutions (FIs) that asked the company to pledge the Onjus and Life5 brands against the loans. To avoid the impending point of its textile division, ETL channeled the cash flows from the food business into the textile business. This didnt go down well with the FIs and they decided against investing in the foods business, stellar(a) to the shutdown of both the divisions in earliest 2001.

Background ETL, then called as Enkay Synthetics, was started as a textile company in the early 1980s. The company was involved in making, bleaching, and dyeing of polyester yarn. During 1988-89, with competition comely fierce in textiles, Tulsidas Goyal (Goyal), Managing Director of the company identified agro-processing as a focus area. In 1990, Goyal set up a plant in Vapi in Gujarat state, to process guavas, mangoes and bananas into puree and concentrates. Enkay Synthetics was interconnected with the fruit-processing unit and renamed as Enkay Texofoods Ltd. The company was successful in the exporting markets (Europe and the Middle East),... If you want to get a full essay, rig it on our website: Orderessay

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