American FMCG giants face middleman trouble in India


American multinational consumer product companies like Colgate-Palmolive and Unilever are facing distribution trouble in India for undermining their most valuable distribution system.

The middlemen who they depend on to reach millions of small neighborhood stores in 8,000 towns and 660,000 villages are now revolting against the companies.

On Thursday, January 6, the All-India Consumer Products Distributors Federation (AICPDF) announced that it has “postponed till further notice” the agitation against Colgate-Palmolive after the company met with the federation and committed to addressing the concerns of distributors.

AICPDF media convenor Prasad Zanwar said Colgate-Palmolive on January 5 invited the office bearers of the federation to discuss with high officials the problems being faced by the distributor fraternity due to B2B and e-B2B platforms. The AICPDF has alleged that large FMCGs are selling their products to wholesalers and B2B platforms at a significantly lower rate, which is hurting their business.

The company’s executives have assured the organization that they will soon take steps to protect their interests and have provided them with an email id to launch a complaint at any time the representatives of the federation feel that something is wrong with the market.

Reacting to the assurance given by Colgate-Palmolive, Zanwar said: “The office-bearers of the federation will keep a close watch on the market regarding this issue. If the situation does not improve after three months, the organization will again adopt the path of agitation.”

“From today the movement against Colgate is postponed till further notice,” he added.

The federation had earlier called for a boycott of Colgate’s Max Fresh product line from January 1, 2022, claiming the FMCG brand had not heeded to their concerns.

The AICPDF had launched a similar protest against Hindustan Unilever (HUL), which was called off after the company met its representatives and addressed their concerns about emerging business-to-business platforms and cash-and-carry players such as Udaan, Jumbotail, Walmart Best Price, Metro Cash and Carry.

Reports of a conflict between FMCG companies and their distributors emerged in the first week of December when AICPDF wrote to 25 FMCG companies, demanding margin parity with online B2B platforms and cash-and-carry players. While most companies held talks with the association by December end, HUL and Colgate-Palmolive were yet to respond, which piqued the already disgruntled association and led to a boycott of their products in Maharashtra.