Wholesale distributors in Kerala observe token strike against Tata Consumer Products over contract termination

V Sajeev Kumar Kochi | Updated on June 24, 2021

Association claims companies belonging to TCPL have unilaterally discontinued the service of some 67 distributors

As many as 5,000 wholesale distributors of Tata Consumer Products (TCPL) in Kerala are observing a token strike on Thursday against the company’s decision to terminate the business contract of few of the distributors.

The All Kerala Distributors Association has organised the protest, alleging that the companies belonging to TCPL such as KDHP, Tata Salt, and Tata Coffee have unilaterally discontinued the service of some 67 distributors who have been engaged in the business for more than 40 years. The reason cited by the Association is that these distributors have protested against TCPL for reducing the commission for sales.

Also read: Tata Consumer Products back in black with a ₹54 crore profit in Q4

Kerala Merchant Chamber of Commerce and Kerala Vyapari Vyavasayi Ekopana Samithy have also extended support towards the strike.

KK Rafeeque, district president of AKDCA, said many of the Tata consumer products are selling like hot cakes in the Kerala market and the company is enjoying a comfortable market share. TCPL has not taken any sincere efforts to resolve the crisis especially when distributors have abstained from moving Tata products since April 10, he added.

TCPL’s statement

Meanwhile, TCPL in a statement said that following the integration of the Tata Chemicals Foods business and Tata Global Beverages into Tata Consumer Products, (TCPL) the company sought to rework its existing distribution network across the country, including Kerala, as part of its integration into one common system.

These changes commenced in September 2020 and have now been completed across the country, except in Kerala where this is currently underway. The changes proposed are in line with the way most FMCG companies operate and will have the benefit of a stronger reach and distribution as well as the creation of more job opportunities overall in Kerala, it said.

TCPL has had detailed discussions with almost all of the distributors in Kerala over the past several months. These revised terms were well appreciated by most of the distributors and include providing a larger business through the integrated TCPL portfolio, support for improving infrastructure, support for digitisation of systems, faster settlement of claims etc., it stated.

These terms or trade have been accepted and successfully implemented by over 5,000 channel partners across the country including in Kerala, where a majority of distributors have been operating under these new terms of trade over the last several months, TCPL said. However a minority of distributors have been trying to create a false picture that TCPL has been unfair and has resorted to reduction in business terms without consultation, it noted.

“They have insisted that they would continue to operate as before, in a manner that was not tenable as terms of trade need to be mutually acceptable for parties to engage in business. Only those minority of distributors who were unwilling to agree to the revised terms were served termination notices, and alternatives appointed,” it said.

Published on June 24, 2021

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