After Hindustan Unilever, it’s now Colgate Palmolive India.
Distributors have decided to stop providing products from Colgate Palmolive India (Colgate India) to Maharashtra in phases of January 1st due to the issue of price disparities between traditional trade and organized chain, which includes players such as Jiomart, Metro Cash & Port and Trade companies B2B like Udaan and Elastic Run.
This movement is similar to the action that the traditional distribution channel will take on the state Hollustan Unilever (HUL) products.
The distributors will first stop proceeding to COLGATE MAXFRESH of the company and to stop providing them with retailers from January 1, and eight days later, they will cease to provide Colgate Vedshakti.
In mid-January, they will cease to provide Colgate’s toothbrushes, reported at least two distributors.
Traditional distributors of the state will stop supplying all COLGATE products from February 1st.
Colgate India, in a response to the Company’s standard, said: “Our strong relationship with distributors, developed over the last eight decades, is based on mutual trust and transparency. We continue to keep the best interests and growth of our partners as a key priority, regardless of their size or scale. “
“We hired our network of distributors and we are looking for their challenges …”
According to a distributor, the major toothpaste had told its traditional distributors of the state during a product launch event that the company sold its products across all channels at the same price. Distributors do not agree, however.
Distributors have used this issue after their APEX organizations sent two letters to FMCG companies, complaining price disparities between traditional distributors and other distribution companies organized to companies (B2B), online and Offline, which entered the sector in recent years.
This problem has started as traditional distributors offer retailer margins from 8 to 12% against 15 to 20% offered by B2B Big-Box stores and online distributors.
The organized commercial channel of distributors commits higher volumes to FMCG companies as a distributor of traditional channels, which facilitates the task of Big Box B2B players to offer higher margins to retailers.
As a result, retailers have increasingly started lifting inventory from the organized chain.
The Federation of Consumer Dispensers of all India consumers (AICPDF), which has more than 450,000 members, had sought a meeting with FMCG companies to solve the problem.
In its first letter sent earlier this month, the AICPDF said if its requests were not satisfied, it would begin with a “non-cooperation movement” against the FMCG companies from January. In its list of requests, distributors have requested uniform prices and programs through distribution channels (traditional, organized B2B). So far, Nestle India, ITC, Dabur and Marico have discussed the issue with traditional distributors, depending on the distributors, but the issue remains unresolved.
Friday, Hul stated in a deposit exchange that he would make sure that the supplies of his products remain uninterrupted and had no commitment with the AICPDF so far.
“Hul has a long-standing relationship with his distributors based on trust … Our distributors have been excessively transmitted that they rely all attempts to create a corner between the company and our trusted distributors,” said Hul in the exchange deposit.
The company also stated that it remained determined to build the capacity of its GT (General Trade) network and had taken steps such as the deployment of technology for the internships of the order via its application EB2B, Shikhar and To support its distributors to increase their direct scope and introduced specifically adapted programs with deemed academic institutions to help them perfect their business skills and become ready for the future.