7 Lakh Retailers, 60,000 Distributors to Boycott FMCG Products
Companies will be given 10 days to resolve issues; if no action is taken within a month, distributors and retailers will begin a boycott of FMCG products.
Ahmedabad, Sunday
Retail shopkeepers and distributors have warned major Fast Moving Consumer Goods (FMCG) companies against unfair business practices. Trade bodies including the Federation of Gujarat FMCG Distributors Association and the Federation of All India Distributors Associations will send letters to FMCG companies within the next 10 days, demanding an end to the alleged injustice faced by retailers and distributors.
If the companies fail to respond positively, around 7 lakh shopkeepers and 60,000 distributors may start boycotting FMCG products within the next one to one-and-a-half months.
Association leaders said that more than 9,000 members currently have monthly turnover above ₹1.5 crore. They are also receiving a large number of complaints from small traders. To strengthen the movement, small shopkeepers are now being enrolled as members of both associations for a fee of just ₹100. After this, traders and distributors across the state will unite against FMCG companies.
The associations said they will first formally communicate their demands to the companies. If the companies refuse to accept the demands, distributors and retailers will stop lifting goods and distributing products in the market. According to the associations, the movement is aimed at protecting both small traders and large distributors.
Leaders alleged that FMCG companies initially used small distributors to enter malls and later started direct supply, taking away distributors’ business. At the same time, risky and financially unstable malls are still being supplied through distributors, increasing the chances of payment defaults and financial losses.
The matter has also been raised before the National Traders Welfare Board formed by the Central Government. Traders have demanded that FMCG companies should reimburse 5 to 10 percent of losses suffered by distributors in cases where payments are stuck due to company policies. They warned that without support, many distributors may collapse financially and workers could lose their jobs.
The associations also claimed that out of 70 lakh registered shops in Gujarat, nearly 7 lakh shops have already shut down. Despite this, FMCG companies continue to insist on 92 percent billing targets. Distributors failing to meet these targets reportedly face incentive cuts.
It was also alleged that salesmen are being pressured to push unsold products into the market, leading to fake billing and bounced cheques issued in similar names. This has caused additional financial losses for distributors. Traders have demanded that FMCG companies immediately remove closed shops from their billing lists.
Gujarat Traders Welfare Board to be Formed
Sunil Singhi said that the concerns of small traders are being taken seriously. He stated that a Standard Operating Procedure (SOP) is being prepared, after which one-to-one discussions will be held to resolve traders’ problems.
He also said that the Gujarat Chief Minister has been advised to form a Gujarat Traders Welfare Board soon. District-level committees will also be created. Similar boards are being formed in Delhi and Madhya Pradesh.
According to Singhi, traders across different states will be united and discussions will be held with companies to find long-term solutions to the problems faced by distributors and retailers.
