Distributors write to FMCG companies for the second time on price parity

Distributors have written a second letter to fast-moving consumer goods (FMCG) companies to discuss price parity in the backdrop of higher margins given to organised business-to-business (B2B) distribution firms than to those in the traditional trade.

According to a distributor, Marico has proposed to sell different packs in the traditional trade and organised B2B trade channels.

Dabur India and Colgate-Palmolive (India) have also come forward to discuss the best way forward for both channels to co-exist, but no conclusion has been reached.

Dabur, the maker of Vatika hair oil and Real fruit juice, has proposed to merge its general trade and modern trade teams so that there is no competition to bring in higher revenue and the same margins are offered across channels. Nestle India has said it has received the second letter while other FMCG companies are yet to respond to Business Standard’s queries. Email queries sent to Reckitt Benckiser India, Britannia Industries, Hindustan Unilever, Tata Consumer Products, Dabur India, Marico, Colgate-Palmolive (India), Godrej Consumer Products, and Mondelez India remained unanswered.

The All India Consumer Products Distributors Federation, the apex body of the distributors of FMCG products, had written its first letter on December 4, warning companies of non co-operation as it sought price parity between traditional players and other organised B2B distribution firms, both online and offline, which have entered the sector in the past few years.