FMCG Distributors Call for End to Deep Discounting, Warn of Non-Cooperation
The All India Consumer Products Distributors Federation (AICPDF) has urged FMCG companies to halt deep discounting practices or risk facing non-cooperation from distributors. The federation, representing around 4,00,000 distributors across India, has raised concerns over the negative impact of aggressive discounting by large-format retailers, e-commerce platforms, and cash-and-carry stores on traditional distribution channels.
Impact on Traditional Distributors
AICPDF claims that deep discounting by modern trade and online platforms is eroding the margins and profitability of traditional distributors, making their business models unsustainable. The federation argues that FMCG brands must ensure price parity across all distribution channels to create a level playing field. This move comes as traditional distributors struggle with pricing discrepancies that allow organized retailers to sell products at significantly lower rates than general trade partners.
Distributors Warn of Non-Cooperation
The federation has warned that if FMCG companies do not address these concerns, distributors may be forced to take non-cooperation measures, which could include refusal to stock certain brands or limiting supply. The AICPDF has emphasized that ensuring fair trading terms across all channels is critical to maintaining a healthy sales ecosystem.
Industry Response and Future Implications
Several FMCG companies have previously faced similar distributor protests, leading to adjustments in trade policies to pacify traditional channels. As supply chain dynamics continue to evolve, balancing modern retail expansion with traditional distributor support remains a key challenge for brands. A failure to address these concerns could lead to disruptions in product availability in general trade, a dominant sales channel in India’s FMCG market.
This development places further pressure on FMCG brands to devise equitable pricing and distribution strategies that benefit all stakeholders. Industry players will be closely monitoring how companies respond, considering the potential impact on market penetration and overall sales performance.