FMCG distributors in Madhya Pradesh have demanded mass resignation against Hindustan Unilever Limited (HUL) expansion of its distribution network in the state. The firm, however, said that it is not removing any of its existing distributors and does not value the relationship with them.
If new distributors are appointed, HUL’s existing distributors fear losing half of their investment in the retail business, their umbrella body AICPDF, in a statement on August 28.
Earlier in the day, HUL advertised the appointment of new distributors for its brands in all major cities of Madhya Pradesh.
Leading FMCG manufacturer invites people willing to invest up to 1-3 crores and can arrange a warehouse with the required infrastructure.
Read also: HUL to invest 700 crore in UP detergent unit by 2025
According to the All India Consumer Products Distributors Federation (AICPDF), due to the said advertisement, the existing dealers of HUL are in ‘sudden panic’ and are seen as ‘immature and unfaithful’.
“HUL distribution business guarantees investment of crores in expansion of credit facilities to retail traders to sustain and grow HUL businesses especially at risk. If new distributors are proposed to be appointed, all existing distributor retail business will lose at least 50% of its investment with the AICPDF.
However, issuing a statement, HUL said: “The advertisement pertains to expanding our work with general merchandise distributors and is not about removing our existing distributors.”
“We believe that the prospects for general merchandise business in this region are bright and look forward to partnering with distributors to take advantage of the opportunities. We conduct our business in a fair and transparent manner, and our relationship with our distributors We value these ties and will continue to do so. Engage with them directly,” the company spokesperson said.
In a similar case, in December 2021 the AICPDF called for a boycott of some HUL products in Maharashtra over the issues of price disparity between traditional distributors and organized business-to-business channels.
But in January it postponed the boycott after talks with the company. AICPDF claims to represent over 4 lakh distributors and stockists across India.
With PTI input.
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