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After HUL, Maharashtra distributors to stop selling products of other FMCGs

Ayushi Kar | | | Updated on: Jan 01, 2022

Seek similar margins to offline distributors as offered to B2B distributors

After blocking products from Hindustan Unilever, distributors in Maharashtra have decided to stop selling products of other FMCG companies, including Colgate Palmolive. The blockade will begin from January 1 onwards in Maharashtra which will then be taken up by distributors in other States.

Dhairyashil Patil, President of The All India Consumer Product Distributors Federation and The Maharashtra State Consumer Product Distributors Federation (MCPDF), told BusinessLine that the decision was taken due to HUL’s refusal to engage with them on their concerns regarding the lack of price parity between traditional distributors and organised B2B distributors. “Similar strikes will also be called out against Colgate Palmolive as well in the future,” Patil said

MCPDF announced on Thursday that it will stop selling HUL’s Kissan range from January 1. HUL and Colgate will be the prime targets of this action by the distributors’ associations. This comes after the AICPDF, the parent body of MCPDF, had written to about 24 FMCG companies to look into issues that are causing distress to offline distributors. It demanded similar distribution margins as offered to organised B2B distributors such as JioMart, Metro Cash and Carry, Walmart, Elasticrun and Udaan.

“Everybody else (all the FMCG companies to whom the letter was written to, besides HUL and Colgate Palmolive) has acknowledged that there is an issue,” said Patil. “The companies don’t want this distribution network to be shattered…so they have assured us that they will be take corrective measures. And try to control the matter as soon as possible, and have assured us that distributors will not be at the losing end in this process.”

Patil warned that other State chapters of AICPDF will commence similar action.

No impact, says HUL

Meanwhile, HUL tried to assuage investor concern on Friday saying that the MCPDF announcement will have no impact on them, which means that the supply of HUL products will remain uninterrupted.

“General trade (GT) continues to be our largest channel and our distributors (redistribution stockists) are and will remain our valued partners. We remain fully committed to ensuring that our distributors earn a fair return on their investments and in enhancing capabilities in our GT network. We have taken several actions such as deploying technology for order placements through India’s largest eB2B app, Shikhar and in supporting our distributors to increase their direct reach. We have also introduced specially tailored programmes with reputed academic institutions to help them hone their business skills and become future-ready.” HUL said in a BSE filing.

It added, “Our arrangements with our distributor partners are ‘not exclusive’. We sell and distribute our products across all channels such as general trade, modern trade, e-ccommerce, cash & carry, B2B etc to make it convenient for our shoppers and consumers to buy our trusted brands. However, based on shopper buying habits, channel structures and cost of operations the assortment offered could be different. As channels evolve, we will continue to take up new initiatives with an objective to help scale up business for our distributors and to strengthen our distribution.”

Published on December 31, 2021
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