HUL - Distributor conflict postponed; company assures to resolve issues

The conflict between distributors and packaged consumer goods giant Hindustan Unilever has been postponed for three months or till further notice, All India Consumer Products Distributors Federation (AICPDF) said late Tuesday. “From today, the movement against stands postponed. The company’s executives have told us they consider distributors as an important component of their channels and the company will take corrective action on the issue,” distributor federation chief Dhairyashil Patil said.

Patil said HUL has “assured it will protect distribution channel interests”, adding that if something goes wrong, then distributors can communicate the same to the company.

On Monday, HUL had said it will address the ongoing conflict with distributors over pricing parity between traditional distributors and organised business-to-business (B2B) platforms bilaterally. “HUL will make all the efforts to address any specific issue bilaterally with its distributors to mutual satisfaction,” a spokesperson had said in response to an ET query.

Distributors have been seeking equal margins from fast-moving consumer goods (FMCG) companies as offered to new business-to-business (B2B) and emerging wholesaler and retailer platforms, and said they will stop selling select products of HUL and Colgate in four-five more states, including Gujarat and Rajasthan, from January 4, after boycotting sales of select packs in Maharashtra from January 1. The distributors have alleged that FMCG companies are selling products at lower prices to wholesalers and B2B channels such as Reliance JioMart, Metro Cash & Carry and Udaan.

Last month, AICPDF had sent letters to 24 FMCG companies including HUL, P&G, , and , demanding a level playing field.

Patil said the movement against is, however, continuing, and will intensify. Some distributors had earlier said they would stop supplying products of Colgate Palmolive’s Max Fresh toothpaste brand in the market in Maharashtra in phases from January 1, followed by Colgate Ved Shakti “if the situation remains the same”.

A spokesperson for Colgate said it has a strong relationship with distributors, developed over the past eight decades. “We continue to keep the best interests and growth of our partners as a key priority, irrespective of their size or scale,” the spokesperson said.