Maharashtra consumer products distributors have decided to stop supplying Hindustan Unilever’s products in the state, in phases, from January 1, said All India Consumer Products Distributors Federation.
The distributors are doing so because they say Hindustan Unilever has not come forward to address price disparity issue between traditional dealers and distributors and organized players like Jio Mart, Metro Cash and Carry, Udaan, among others.
In December, AICPDF had written an open letter to major FMCG companies raising up the issue that organized business-to-business players have been indulging in predatory pricing by offering products at a lesser price to retailers, thus threatening distributors’ trade and goodwill.
AICDF sought one pricing pan idea and FMCG companies to make sure that preferential treatment is not given to any enterprise irrespective of its volumes.
After this, some FMCG companies were said to have come forward and acknowledge the price disparity issue and sort it out, according to reports.
However, distributors say that HUL hasn’t acknowledged the issue and therefore, they would stop supplying HUL products in Maharashtra from Jan 1.
Distributors would first stop supplying Kissan products in the state from Jan 1, and if the talks with the company don’t go through, they would stop supply of Glow and Lovely from Jan 8 followed by Rin products, said Dhairyashil Patil, president of AICPDF.
Meanwhile, HUL has said its arrangements with its distributors is not exclusive.
It sells and distributes its products across all channels such as General Trade, Modern Trade, eCom, Cash & Carry B2B and based on shopper buying habits, channel structures and cost of operations the assortment offered could be different, the company said in a statement to ET Now.
HUL will continue to take up new initiatives to help scale up business and strengthen its distribution, it said.
Further, it added that general trade is its largest channel and It has ensured that its distributors earn a fair return on their investments and in enhance capabilities in its GT network.
