HUL, GSK Asia to scrap distribution pact for OTC products by next year

In 2018, HUL had announced that GSK Consumer Healthcare will merge with HUL in an all-stock deal

Hindustan Unilever (HUL) and GSK Consumer have mutually decided to terminate the distribution agreement of GSK Consumer’s over-the-counter (OTC) products that include  Eno, Crocin, Iodex, Sensodyne by November 2023, HUL said in a stock exchange filing. This agreement ends 1.5 years ahead of the agreed period.

“The company, GSKAPL (GSK Asia) and GSKCPL (GSK Consumer)  have mutually agreed and expressed their intention to terminate the Agreement(s) with effect from 8th November, 2023.

As per the Agreement(s), the one-year notice period for termination shall commence from 9th November, 2022,” HUL said. It added that this shall not have any material effect on the operations of the company.

In 2018, HUL had announced that GSK Consumer Healthcare would merge with HUL in an all-stock deal. The deal was completed in April 2020, and it acquired GSK Consumer brands, which include Horlicks, Boost, Viva and Maltova. 

The deal with GSK Consumer also had a five-year agreement to distribute the latter’s OTC products, which gave HUL access to the chemist channel in India. After the consumer health division of GSK was spun off, in July, Haleon was launched  as an independent company housing brands such as Sensodyne, Eno, Iodex, Otrivin, Crocin, and Ostocalcium. 

According to industry sources, HUL earns around  Rs 300- 350 crore from the sale of these products.