Colgate Palmolive warned by FMCG distributors, to take strict actions over price disparity issue

After Colgate Palmolive India failed to respond to the issue of product price differential between traditional and business-to-business distributors, FMCG distributors in Maharashtra have threatened the corporation with legal action.

FMCG distributors are protesting price disparities between traditional trade and business-to-business retailers such as Jiomart, Walmart, Metro Cash & Carry, Booker, ElasticRun, udaan, and others, and are requesting an equal playing field from manufacturers.

Colgate Palmolive (India) commented on the situation, saying that the company appreciates its strong connections with its distributors and is working to address their difficulties and create solutions that would help them grow their business.

"We have engaged with our distributor network and are looking to address their challenges and find solutions that help grow their business, ensuring our consumers continue to have access to their favourite and trusted brands," said a statement from Colgate Palmolive (India) Ltd.

The All India Consumer Products Distributors Federation (AICPDF), which represents over 4 lakh distributors and stockists across India, is in discussions with a number of FMCG companies about the problem.

"Almost all the companies of FMCG were mailed on the same subject two weeks ago by the organisation...(and) almost all the companies have assured to solve this problem after talking with the organisation, but Colgate under its obstinate attitude till now, neither is talking to the organisation nor is responding," said AICPDF in a statement.

Due to this "obstinate attitude," the AICPDF has announced that starting January 1, no Maharashtra distributor will sell Colgate's Max Fresh brand in the market for the next week, and if the company does not come to talk, the distributor will not sell the Ved Shakti brand for the following week, according to the association.

Over the last eight decades, Colgate-Palmolive has created excellent ties with distributors, according to the company.

"We work hard to cultivate trust and transparency and we will continue to prioritise the growth of all of our partners irrespective of their size and scale," it added.

FMCG wholesalers in Maharashtra announced earlier this week that they would stop distributing HUL's products because the company had refused to engage in dialogue with them regarding price disparity concerns.

The AICPDF had previously called for a "non-cooperation" campaign against FMCG firms.

B2B retailers are supplying FMCG products to retailers and local stores at lower rates than they offer, according to the letter, and this is "adversely affecting" their reputation and goodwill.

"Hence our demand is that we also receive those products at prices at which we can also offer the same prices as Jio Mart /B2B companies," the association had said in an open letter to FMCG companies.