What is a Cartel?

Learn about Cartels with Ajay Devgan

 

Case breakdown: Movie Once upon a time in Mumbai

The scene that you saw shows how Sultan (played by Ajay Devgan) is trying to be a peacemaker. He plays a role of a smuggler in the movie. His major achievement in the scene is that he succeeds in bringing together everyone who actually want to kill each other. He suggests that they should all work together to extract most benefit. Later he divides the city amongst four gangsters and decides that all should work together. He does this for the sole purpose of promoting and controlling drug operations in Mumbai.

What are Cartels?

Cartels are formed in organizations as well. Group of producers join hands to control and manipulate prices of the product. They are generally independent businesses or countries that act as a single producer who can fix prices of the goods and services without competition. When they act as a single producer, they can reduce supply and manipulate market by increasing prices. This affects customers as they have to pay higher prices.

According to OECD (Organization for Economic Cooperation and development) which is an international organization that works to build better policies. Along with the governments, it builds policies to detect cartels. It says “Strong sanctions are a fundamental component of an effective antitrust enforcement policy against hard core cartels.”

According to section 3(1), cartels in India are prohibited and is a civil offence forbid ed under competition act of 2002.

Many a times cartels aim to increase the prices of the product and output restriction hence they are disadvantageous to the customers. Cartels also act as a barrier for new entrants in the market.

Drug Cartels are criminal organizations. Their intention is supplying and maintaining a drug operation chain. Sinaloa Cartel is the biggest drug cartel in the world which operates in Mexico. The Sinaloa Cartel operates in the “Golden Triangle” in the states of Sinaloa, Durango, and Chihuahua.

References:

https://www.oecd.org/competition/cartels/

https://en.wikipedia.org/wiki/Sinaloa_Cartel

 

Written by: Gitika Chandra

 

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