Who will get first access to global FMCG produce?

By Nachiket Kelkar and Vivin Mathew/ CNBCTV18

If you thought only the Ambani brothers are fighting it out over the right of first refusal, think again. Retail chains like Big Bazaar and MyDollarStore are at loggerheads with global FMCG companies over the right of first access. Large FMCG companies are trying to prevent retailers from directly importing and selling brands that have not yet been introduced in India.

Nestle Hot Chocolate Drink, Jacker Potato Chips, VO5 Shampoos and Conditioners are just some of the many foreign brands that MyDollarStore imports and sells through its outlets. Global FMCG companies that manufacture these brands are crying foul because they have not yet introduced them in India. Sources said the Indian units of companies like HUL, Colgate, and P&G have written to the Customs Department asking it to confiscate such imported goods. They allege they have the right of first access to these brands and hence only they will decide when to sell them in India. The retailers call the move unfair saying they source the products from legal channels unlike the black marketers of the past.

Umesh Asher, MD, Sankalp Retail Value Stores, said, “Today with genuine products coming in from companies themselves or their distributors worldwide, I don't think it makes sense not to get these products or to control or be a hurdle in getting those products to Indian consumers.”

The retailers have initiated discussions with the FMCG players on this issue. But so far there is no concrete solution in sight. That has not deterred players like MyDollarStore in getting more products from international makers.

Sankalp Retail, which presently has 50 MyDollarStores aims to have 200 to 250 in two years. It says it will continue to focus on sourcing more foreign brands that are not currently sold in India. It's in talks with companies like Pepsi, Colgate, Nestle and Master Foods hoping for an amicable resolution.