Soap Giants Back Lever In Trade Battle With Kerala Traders

A maven of MNCs and leading Indian companies in the soaps and toiletries segment has rallied in support of Hindustan Lever which is locked in a grim battle of nerves with traders in Kerala over the boycott of the Unilever subsidiarys products. The Indian Soaps and Toiletry Manufacturers Association (an umbrella organisation for the industry that has MNCs and Indian makers of soaps as members) has decided to back HLL and will meet Kerala Chief Minister E K Naynar soon, said a HLL source.

According to HLL sources, Procter and Gamble, Karsanbhai Patel of Nirma and Adi Godrej of Godrej Soaps have all decided to fight the unjust attitude of traders in Kerala.

 

We have the support of Tata Tea also, he told Business Standard. He claimed R K Krishna Kumar, managing director of Tata Tea, has rallied tea traders in support of HLL, which has hunkered down for a long battle with traders over what it sees as their `unreasonable demand for a hike in commisions. Krishna Kumar is away in Pakistan as a member of a tea delegation and could not be contacted to confirm the statement.

The HLL official said the ITSMA has decided to initiate legal action against stockists supporting the boycott. One reason for this is the fact that commissions paid to traders stockists or retailers are determined on an all-India basis are determined through informal discussions. The Lever subsidiary is also trying to win support from other major players in the field of consumer goods and pharmaceuticals. Theres a real fear that direct action by the trading community could spread to other sectors, the official said. He claimed that in some parts of Kerala, traders were trying to drum up public support for a boycott of certain sections of the pharmaceutical industry.

HLL racks up an annual sales of Rs 400 crore from Kerala which accounts for around 3 per cent of its total sales in the country. The company has beefed up its market support service in the adjoining districts in the neighbouring states to minimise the impact of the trade boycott, an HLL official confirmed.

He ruled out the possibility of any other Indian firms or MNC instigating the traders in Kerala to boycott HLL products. It is not true since almost all of them in the industry have come forward to back us in our fight against unjust demand of the traders, the official said.

Even in Kerala, he said, HLL products are being pushed through co-operatives and super bazars. Since HLL is a high-profile company, some disgruntled traders seem to have decided to take on the MNC affiliate to grab national attention.HLL bosses believe that the trade boycott was being stage-managed by just three leaders who are not even stockists or traders of HLL products. He confessed that they had influence in a few districts like Kozhikode, Kasargod, Ernakulam and Mallapuram, which had affected HLL sales.

But the boycott has not been a success in other parts of the state, he said.

Claiming that the boycott was fizzling out, the official said many retailers have started procuring stocks from super bazars and co-operative units which has ensured steady offtake of HLL products by consumers. He said since HLL products occupy a major portion of the basket of options that a trader offers to the consumer, retailers are having to deal with the erosion of buyers confidence in the trade lobby.