Distributors Contemplate Halting Buying of Colgate Goods
New Delhi's Standoff: Colgate Palmolive is facing heat from distributors in Maharashtra who have announced a suspension of all product purchases beginning May 12. The reason? The distributors claim that Colgate is dishing out deep discounts to quick-commerce channels like Blinkit, Zepto, and Instamart, a move that hinders the interests of general trade[1][2][3].
"Colgate has been pushing stock to quick commerce channels at an alarming rate, with discounts as high as 60% off the Maximum Retail Price (MRP)," declares the All India Consumer Products Distributors Federation (AICPDF) in a statement. Representing over 4.5 lakh FMCG distributors across India, this umbrella body voices frustration, unresolved grievances, and escalating business losses that have pushed distributors and the broader general trade network to the brink[1].
The AICPDF didn't mince words when they cautioned that if Colgate fails to address these grievances, the Maharashtra-level action could quickly escalate into a nationwide battle, possibly leading to the removal of Colgate products from retail shelves or coordinated disruptions of its supply lines[1].
The federation has been vocal about these concerns, including allegations of predatory pricing by FMCG manufacturers in favor of Quick Commerce (Q-Com) platforms. Previous steps taken by the association include reaching out to the fair trade regulator, the Competition Commission of India, seeking a probe into these pricing practices[1].
But there's more to the story. The distributors have also raised concerns over Colgate issuing trade credit notes without applying the corresponding Goods and Services Tax (GST), further straining relations[3].
This spat showcases the complexities that companies in the fast-moving consumer goods (FMCG) sector face when balancing various distribution channels and pricing strategies. Keep an eye on this developing story.
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- The All India Consumer Products Distributors Federation (AICPDF) has accused Colgate Palmolive of suspending commerce with traditional distributors in favor of quick-commerce channels like Blinkit, Zepto, and Instamart, potentially causing unresolved grievances and financial losses for the general trade.
- The AICPDF, in their statement, revealed that Colgate has been providing deep discounts up to 60% off the Maximum Retail Price (MRP) to these quick-commerce channels, which could be hurting the interests of traditional distributors.
- In addition to the accusations of preferential pricing, the AICPDF has also expressed concern over Colgate's practice of issuing trade credit notes without applying the Goods and Services Tax (GST), further straining relations between the companies and the distributors.
