Indian vendors threaten to disrupt supply in protest against Reliance

A merchant selling consumer goods shows off Reliance’s JioMart point-of-sale machine that he uses to order supplies for his store in Sangli, western state of Maharashtra, India on October 21, 2021 Photo taken on October 21, 2021 October 2021. REUTERS / Abhirup Roy / File photo

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NEW DELHI, December 5 (Reuters) – Indian household goods vendors have threatened to disrupt supply to mom-and-pop stores if consumer companies supply products at lower prices to Reliance Industries (RELI.NS) , according to a letter seen by Reuters.

Reuters reported last month Indian salespeople representing companies such as Reckitt Benckiser, Unilever (ULVR.L) and Colgate-Palmolive (CL.N) said their sales fell 20-25% in the past year as mom- and-pop were increasingly associated with the Indian billionaire. Mukesh Ambani’s confidence.

Ambani’s greatly reduced offerings prompted more stores to order digitally from its JioMart Partner app, posing an existential threat to more than 450,000 corporate sellers who, for decades, served every corner of the vast nation going from store to store to take orders.

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Citing the Reuters article, the Federation of Indian Consumer Products Distributors – which has 400,000 members – wrote to consumer companies demanding a level playing field, saying they must get products at the same prices as others. large distribution companies such as Reliance.

If the demand for price parity is not met, the group said in its letter, its vendors will stop distributing products to mom-and-pop stores, nor will they supply newly launched consumer goods if they are. such partnerships continue beyond January 1.

“We have gained a reputation and goodwill among our retailers by providing them with good service for many years … We have decided to call it a ‘Non-Cooperation’ movement,” the letter reads.

Group chairman Dhairyashil Patil said the letter was sent to Reckitt, Hindustan Unilever, Colgate and 20 other consumer goods companies.

None of the three consumer companies, as well as Reliance, responded to requests for comment.

Mum-and-pop stores, or “kiranas”, represent 80% of an amount of nearly 900 billion dollars retail market in India. About 300,000 of those stores in 150 cities order products from Reliance, with the company setting a target of 10 million partner stores by 2024.

Traditional distributors told Reuters they were forced to cut fleet of vehicles and staff because their business suffered because they could not match Reliance’s prices.

Jefferies estimated in March that Kiranas “will steadily increase the share of” Reliance “purchases at the expense of traditional distributors.” Such sales for Reliance could reach $ 10.4 billion by 2025, compared to just $ 200 million in 2021-2022, Jefferies estimates.

(This story removes the superfluous word in paragraph 3)

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Reporting by Aditya Kalra in New Delhi and Abhirup Roy in Mumbai. Editing by Gerry Doyle

Our standards: Thomson Reuters Trust Principles.

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