CCI Probes Global Fragrance Giants Over Alleged Anti-Poaching Deals
India’s antitrust watchdog, the Competition Commission of India (CCI), has launched an investigation into global fragrance makers Givaudan, DSM-Firmenich, and International Flavors & Fragrances (IFF) over allegations of anti-poaching agreements that may have restricted employee mobility and suppressed wages. The probe, initiated in August under the CCI’s leniency programme, is based on evidence including at least 30 internal communications suggesting the existence of a long-standing “gentlemen’s agreement” among the firms not to hire employees from rivals or clients without prior consent. This marks the regulator’s first major case focusing on labour market practices rather than traditional price-fixing concerns.
According to the CCI’s order dated August 13, the alleged coordination dates back to 2002 and may still be ongoing, involving exchanges via emails, calls, and chats. Extracts from internal emails reveal instructions to avoid hiring from key clients and competitors, even if it meant deterring potential candidates. While IFF has confirmed its cooperation with the investigation, DSM-Firmenich declined to comment, and Givaudan has not responded. The case also aligns with similar ongoing probes by regulators in Europe, the UK, and Switzerland into potential collusion in the fragrance industry.
The investigation comes amid rapid growth in India’s flavours and fragrances market, projected to reach $5 billion by 2033. The CCI has sought detailed recruitment records from IFF, including hiring data and communications with competitors spanning over a decade. Despite IFF’s attempt to challenge the probe in the Delhi High Court on grounds of limitation, the court upheld the CCI’s authority, noting that the alleged misconduct could be ongoing. If found guilty, the companies could face significant penalties, reinforcing India’s increasing scrutiny of corporate practices affecting labour rights and fair competition.
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