Colgate-Palmolive India said it was holding talks with its sales representatives in the country after they threatened to disrupt supplies in one of India's most populous states and alleged they were being unfairly treated on pricing.
Reuters reported in November that Indian sales agents of companies including Reckitt Benckiser , Unilever and Colgate had seen their sales drop by 20%-25% over a year as mom-and-pop stores partnered with Indian billionaire Mukesh Ambani's Reliance to secure lower prices.
Following the story, sales representatives threatened to stop supplying the mom-and-pop stores, known in India as kiranas, unless they were given the same price deals as big corporate distributors such as Reliance.
Last week, a group of distributors said they will stop some Colgate products from 1 January in Maharashtra, the richest and one of the most populous states in India.
Resolve The Challenges
In a statement to Indian stock exchanges, Colgate-Palmolive India said 'it is directly engaging with its distributors to resolve their challenges,' without elaborating.
'The company will ensure that supply of its products remains uninterrupted in the state,' the statement said.
Distributors had told Reuters that Ambani's discounts were prompting more stores to order digitally from his JioMart Partner app, posing an existential threat to more than 450,000 sales representatives, who for decades have gone store-to-store to take orders.
A Reuters review of purchase deals on the JioMart Partner app in November showed a Mumbai retailer could bulk buy a two-tube pack of Colgate MaxFresh toothpaste for about 115 rupees ($1.55), while a traditional Colgate sales agent offered it at 154 rupees, roughly a third higher.
Supply Disruption
In a statement last week, All India Consumer Products Distributors Federation (AICPDF) said its members would stop supplying the MaxFresh brand starting 1 January in Maharashtra, and later disrupt other product supplies. The group estimates Maharashtra accounts for roughly 40% of consumer goods sales in India.
Hindustan Unilever, Unilever's India arm, said in a statement its representatives had met AICPDF to understand their concerns, and the company will address issues bilaterally.
Distributors 'are and will remain our valued partners,' the company said.
Reckitt Benckiser did not respond to a request for comment.
Colgate-Palmolive reported net sales increase of 9.5% and an organic sales growth of 5%, to $4.3 billion, in the second quarter of its financial year.
News by Reuters, edited by ESM. For more A-Brands stories, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.
