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Philips is sparking price war, say Indian LED makers

Philips is sparking price war, say Indian LED makers

By BizLED Bureau

Jan 27, 2017: LED lighting manufacturers in India have alleged that some companies are indulging in unethical practices to get government tenders at very low prices under the popular Indian government’s LED bulb scheme, which dictributes LED bulbs are at a very subsidized price. They alleged that these tunruly practices are triggering a price war in the lighting industry.

The domestic manufacturers have indirectly hinted at Philips Lighting India, which has bagged a tender by Energy Efficiency Services Ltd (EESL), at Rs 38 per 9W bulb. Philips has put forth a condition that it should be given the entire contract to supply 50 million LED lamps in India. In a recent tender, Philips had quoted Rs 42.85 per LED lamp to supply 40 million lamps. A smaller company, Rudayil Lighting, had quoted Rs 38 per piece, but it can supply only 50 lakh bulbs.

Philips’ competitors condemned the company for putting forth conditions to bag the full contract in September 2016, which eventually sparked off a price war, and distorted the LED lighting market.

The domestic manufacturers have pointed out that Philips had quoted Rs 38 per lamp in September 2016, against the earlier price of Rs 54 per piece. The same company has quoted higher in the last tender in January 2017. “This is monopolistic,” they said.

The manufacturers have pointed out that while this unethical bidding is going against the government’s ‘Make in India’ program, it is also demoralising the other manufacturers in India. As a result, this type of bidding will kill the industry.

Saurabh Kumar, managing director, EESL, said that in September 2016 tender, other domestic companies were given an offer to match the price of Rs 38 per piece, but none of the companies agreed to do so. Consequently, the entire contract went to Philips.

Eleven companies participated in the September 2016 tender, of which, four companies had quoted less than Rs 43 per piece.

The January 2017 tender by EESL was also participated by 11companies including Philips Lighting, Crompton Greaves Surya Roshni. EESL has once again asked the next five bidders to match the lowest price quoted by Philips.

However, in this price war, the users come out victorious as they get LED bulbs at very affordable prices.

 

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