HUL & Colgate-Palmolive yet to respond on margins with B2B entities: AICPDF

‘While distributors are given 3.5-5 per cent margins by FMCG companies, new platforms negotiate 12-15 per cent margins which is disrupting the entire market,’ says AICPDF.

The distribution federation body All India Consumer Products Distributors Federation (AICPDF) has said that consumer and personal care behemoth Hindustan Unilever Limited and Colgate-Palmolive are yet to respond on margins given to its distributors with business-to-business entities.

Around 25 FMCG companies have so far responded to the trade body’s demand to offer equal margins to them and B2B platforms said Federation’s President Dhairyashil Patil. He further added Hindustan Unilever Limited and Colgate-Palmolive are two companies that haven’t reached out to us for further discussions.

The trade body said they are not satisfied with the company’s answers. Distributors have been at war with FMCG companies since the start of December this year over the margins offered to wholesale platforms such as Udaan, Walmart’s Best Price and Metro Cash & Carry.

According to the federation, it represents about 4 lakh distributors and stockists across the country, the FMCG companies gave better discounts and margins to these emerging platforms which in turn eat into their business. The margins were initially good but since the pandemic has started, these companies have depended more on these platforms.

The distribution federation also said that if the FMCG companies had to stop launching new products and stocking goods that are sold to the new platforms at higher margins if they don’t comply with their conditions and demands.

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