Beset with problems, FMCG distributors tell govt: 'Intervene or we will collapse'

The battle between FMCG distributors and modern trade has escalated after months of simmering tension. Weeks after raising issues of price discrimination and deep discounting with FMCG companies, the Federation of All India Distributors Associations (FAIDA) has written about its concerns to the commerce ministry. In its plea to the government, FAIDA has claimed unviability of business operations owing to the shrinking business pie and unfair commission structures.

Distributors claim that three factors that have led to the shrinking business pie—modern trade, foreign direct investment (FDI) in B2B, and the overall consumption slowdown that has been playing out over the last couple of months. This, they claim, has led to a 20-25 percent hit in overall business.

This declining business has made operations unsustainable for many of the distributors. “We have seen a 30,000 drop in the number of memberships over the last year. In January 2018, we had 4.5  lakh members and now we have about 4.2 lakh members,” said CH Krishna, president, FAIDA. Most of the decline in members has been from the city as there is a larger presence of modern trade, said FAIDA.