A month after the Kerala government agitated to ban corporate retailers from the state, the All Kerala Distributors’ Association (AKDA) is planning to launch an agitation against major FMCG companies. “We are not against any retail chains. What we are against is the undue terms and favours that the companies offer large retailers,” P Venkitarama Iyer, president, AKDA, told Indiaretailing.
Last month, the association wrote a letter to over 60 FMCG companies protesting against alleged moves by the companies to bypass distributors and sell products directly to major retail chains. The letter also opposed the special rates and credit terms that FMCG companies offer large retail chains.
So far, there has been no response from the managements of any of the companies, which is why the AKDA has now decided to launch a protest against the companies, Iyer added. However, he declined to disclose any company’s name.
The association is planning to hold dharnas outside the Kochi offices of some of the companies. The organisation will also launch a campaign in Kerala to create awareness about the various “discriminatory practices” followed by the companies and their implications. According to Iyer, some FMCG companies are also looking at appointing special distributors to cater exclusively to large retail chains.
“We will work with all like-minded organisations to oppose the practices of FMCG companies that discriminate against traders and consumers. Nationally, the issue will be taken up by the Federation of All India Distributors’ Association,” Iyer informed.
Even when existing distributors supply products to retail chains, the FMCG companies instruct them to follow special pricing and credit terms that have been worked out between the companies and the retailers, he said.
Such practices will have a negative impact on distributors and small traders, who have helped the companies grow in Kerala, Iyer asserted.
The AKDA is demanding that the FMCG companies supply products to the large retail chains only through existing distributors. In its letter, the organisation has also said: “Terms of payment and special discounts and favours to these special outlets shall not be thrust upon the distributors by the companies.”
The AKDA also wants the FMCG companies to stop extending undue support to the large retail chains.
– Vishnu Rageev R, Bangalore Bureau