FMCG distributors file petition with CCI against Blinkit, Zepto, Instamart

Quick commerce companies are indulging in practices of deep discounts and exclusive supply/distribution agreements, thereby engaging in unfair pricing and affecting the competition, the petition said

Fast-moving consumer goods distributors association, the All India Consumer Products Distributors Federation (AICPDF), has filed a petition with the Competition Commission of India (CCI) against leading quick-commerce (qcom) platforms --- Blinkit, Zepto, and Swiggy Instamart --- alleging unfair pricing and monopolising the market.

 

According to sources, and a document seen by Business Standard, the plea was submitted by Dhairyashil Patil, president of AICPDF.

 

 “Quick commerce and hyperlocal delivery have become very popular over the last few years. The word quick commerce defines fast and efficient delivery services. It usually delivers products within a few minutes,” the petition said.

 

 “Quick commerce companies are indulging in practices of deep discounts and exclusive supply/distribution agreements, thereby engaging in unfair pricing and affecting the competition in the market for selling consumer goods,” it alleged.

 

The petition notes that these practices are negatively impacting the livelihoods of over 1 crore mom-and-pop stores as well as the operations of super stockists across the country.

 

In its prayer, the peitition referenced a recommendation by the Parliamentary Committee on Digital Markets, which suggests that competitive behaviour in the digital market should be evaluated to prevent monopolies, rather than relying solely on ex-post evaluations.

 

In response to the rapid growth of online retailing, FMCG distributors have been meeting with retailers across various cities in India since January to address these issues. Last year, AICPDF raised concerns with the finance ministry regarding the fund utilisation and accumulation by qcom companies, as well as the deep discounting of goods on their platforms.

 

In October last year, it had first written a letter to CCI over various issues the traditional supply chains were facing due to the rapid growth of qcom, which includes the appointment of these platforms as direct distributors of FMCG items by several companies.

 

Additionally, the federation had reached out to the Food Safety and Standards Authority of India (FSSAI), which subsequently required e-commerce and quick-commerce food business operators (FBOs) to ensure that products delivered to consumers have a minimum shelf life of 30 per cent or 45 days before expiry of products at the time of delivery. 

 

It had also written to the Ministry of Health and Family Welfare and the Ministry of Road Transport and Highways, requesting an inquiry into the use of private vehicles by qcom and ecommerce companies for commercial operations. 

Crux of the matter

 

> Petition states that Zepto is valued at $5 bn and operates over 250 dark stores, while Blinkit operates in more than 30 cities in India

> It highlights that quick commerce firms are indulging in practices of deep discounts and exclusive supply/distribution agreements

> Petition also points out that there are 10 million mom-and-pop stores across the country and quick commerce is affecting their livelihood

> It demands that competitive behaviour in the digital market needs to be evaluated before markets end up monopolised