Following Hindustan Unilever, Colgate products expected to fly off the shelves in MH
Hindustan Unilever – HUL said it will ensure that its products are available in the state without interruption.
Colgate Palmolive India has taken over from Hindustan Unilever. Due to price disparities between the traditional trade and organized channel, which includes players like Jiomart, Metro Cash & Carry, and commerce B2B companies like Udaan, and Elastic Run, distributors have decided to stop supplying Colgate Palmolive India (Colgate India) products in Maharashtra in phases starting January 1.
This action is comparable to what the traditional distribution channel will do in the state with Hindustan Unilever’s (HUL) products.
From January 1, distributors will stop acquiring Colgate MaxFresh from the company and supplying it to retailers, and eight days later, they will stop supplying Colgate Vedshakti as well.
“Our solid relationship with distributors, formed over the past eight decades, has been based on mutual trust and transparency,” Colgate India stated in answer to Business Standard’s enquiry. Regardless of the size or scale of our partners, we continue to prioritize their best interests and progress.” We’ve reached out to our distributor network and are working to resolve their issues…”
After their apex body sent two letters to FMCG companies, complaining about price disparities between traditional distributors and other organized business-to-business (B2B) distribution firms, both online and offline, that have entered the sector in recent years, distributors resorted to this action. Traditional distributors provide merchants 8-12 percent profits, compared to 15-20 percent margins offered by big-box B2B stores and Internet distributors.
Distributors in the organized trade channel commit bigger quantities to FMCG businesses than traditional channel distributors, allowing big box B2B operators to provide higher margins to retailers. As a result, retailers have begun to pull inventory from the organized channel in greater numbers.
Hindustan Unilever Limited
To fix the issue, the All India Consumer Products Distributors Federation, which has over 450,000 members, requested a meeting with FMCG companies. In its first letter, the AICPDF claimed that if its requests were not met by January 1, it would launch a “non-cooperation movement” against FMCG companies. Distributors demanded similar pricing and strategies across all distribution channels in their list of demands (traditional, organized B2B). According to distributors, Nestle India, ITC, Dabur, and Marico have discussed the issue with conventional distributors so far, but the problem has not been resolved.
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