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All India Consumer Products Distributors’ Federation (AICPDF) has postponed the blockade against Colgate Palmolive after the company were assured it will protect offline distributors’ interests.
The federation, which boycotted the sale of certain Hindustan Unilever and Colgate Palmolive products from January 1, 2022, has decided to appraise the market conditions for three more months. In case, conditions for distributors do not improve, the federation will re-evaluate, and restart the strike. The federation is seeking parity of margins between traditional offline distributors and B2B e-distributors, such as JioMart, Metro Cash and Carry, Walmart, and Udaan.
AICPDF met with Colgate Palmolive management on Wednesday, where, according to the federation, they were assured that their concerns will be taken seriously. In light of this, the federation decided to postpone its blockade against Colgate for three months.
Last week, HUL and Colgate had been singled out as the prime targets against which the federation would take civil action because according to the federation, the companies refused to engage with organisation regarding issues of lack of pay parity between them and online distributors. The federation had sent a letter detailing their issues to 24 FMCG companies, out of which 22 companies (besides HUL and Colgate) responded positively, stating that they will give the matter their consideration.
According to a top FMCG executive however, ensuring that there is parity in margins between online B2B distributors and traditional offline players, is something that is far beyond their control.
“B2B players are selling their goods on prices lower than what traditional players can provide. They have the wherewithal to do so, due to their business models which allows them to take on the overhead. FMCGs can only set the maximum retail price-the maximum price at which a good can be sold in the market. Thus FMCG companies cannot do much more” a top FMCG executive told BusinessLine , on conditions of anonymity.
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