Colgate-Palmolive says it is working with distributor network to resolve their challenges
In an exchange filing on Wednesday, the company said that it has a strong relationship with its distributors and supply chain partners, developed over the past eight decades, based on mutual trust, fairness and transparency
January 04, 2022 / 14:10 IST
AICPDF last week had said that the distributors in Maharashtra will stop stocking Colgate's Max Fresh toothpaste from January 1.
FMCG major Colgate-Palmolive (India) Ltd on Tuesday said it is working closely with its distributor network to address their challenges and will ensure a steady supply of its products in Maharashtra.“Please note that the company has a strong relationship with its distributors and supply chain partners, developed over the past eight decades, based on mutual trust, fairness and transparency,” the company said in a response to a clarification sought by the exchanges on news reports that certain Colgate-Palmolive products will go off shelves in Maharashtra.“Further, the company engages with distributor networks directly on an ongoing basis to address their business challenges, including but not limited to a fair return on their investment,” it said.Colgate-Palmolive, however, also said that it is not engaging with the All India Consumer Products Distributors Federation (AICPDF).“Please also note that the company is not aware of any information in this regard which requires disclosure to exchanges. Further, there is no material impact of the news article on the company and the company will ensure that supply of its products remains uninterrupted in the state,” it said.AICPDF had last week said that the distributors in Maharashtra will stop stocking Colgate’s Max Fresh toothpaste from January 1. The federation’s move came after the company did not pay heed to its demands asking for margin parity with emerging online business-to-business or B2B platforms such as Udaan, Jumbotail and cash-and-carry players such as Walmart Best Price, Metro Cash- and-Carry.Read: Why HUL, Colgate-Palmolive are in a tussle with distributorsThe association alleges that the companies such as Hindustan Unilever and Colgate-Palmolive are offering higher margins to these platforms, hurting the business of its members.FMCG companies offer 3.5-5 percent margins to traditional distributors, but new platforms are able to negotiate 12-15 percent margins, given their bulk orders, distributors say.Hindustan Unilever Ltd also held a meeting with AICPDF and said is looking in the matter.“In response to the request we had received from AICPDF, company representatives met them to understand their concerns and feedback about the evolving route to market (RTM) models. HUL reiterates that general trade (GT) continues to be our largest channel and our distributors (Redistribution Stockists) are and will remain our valued partners in our quest to serve the needs of our consumers across India,” the company said in an email response. “HUL remains fully committed to ensuring that our distribution partners earn a fair return on their investments and work collaboratively in enhancing their capabilities to make them future-fit. As an organisation committed to the highest level of customer centricity, HUL will make all the efforts to address any specific issue bilaterally with its distributors to mutual satisfaction.” Reports of a conflict between FMCG companies and their distributors emerged in the first week of December when AICPDF wrote to 25 consumer product manufacturers, demanding margin parity with online B2B platforms and cash- and-carry players. While most companies held talks with the association by December-end, HUL and Colgate-Palmolive were yet to them, which piqued the already disgruntled association.
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