Mondelez India forcing us to carry out business with dummy outlets, say Gujarat distributors

Answer: Cadbury.

Mondelez India may have to swallow a bitter pill if it doesn’t clarify its position over the allegations made by local distributors of Gujarat. The company’s products like Cadbury chocolates have been taken off the shelves from stores in Gujarat as distributors are alleging that Mondelez is forcing them to carry out business with dummy outlets, reports Economic Times.

The distributors are pressing 14 demands and have stopped all transactions with the company from March 15.

The issue, for now, is restricted to Gujarat but it may soon spill over to other states like Delhi, Andhra Pradesh, West Bengal, Maharashtra, Haryana and Telangana.

Reacting to the issue, fast-moving consumer goods (FMCG) associations wrote to Mondelez in identical letters, saying “the appeals (from Gujarat distributors) are very sensitive and serious… We are under assumption that this may happen in our state also… We advise you to take correction immediately, failing which we will be compelled to start non-cooperation in our state also.”

In its defence, Mondelez India said, “We never conduct business in a non-compliant manner. Our relationship – like many in the FMCG industry – is with our distributor partners to whom we sell stock,” a Mondelez India spokesperson said. “We work on an auto replenishment mode and our revenue is based on what we sell to these distributors – who in turn sell stock to retailers.”

On the other hand, CH Krishna, President of the Federation of All India Distributors’ Associations, has said the company is always ‘forcing distributors’ to conduct sales to outlets that do not have a licence from the Food Safety and Standards Authority of India (FSSAI).

Responding to these allegations, the Mondelez India spokesperson said, “We have addressed all key concerns of our distributor partners during our various discussions – including those of margins which were evaluated just a few months ago. Despite this, certain external parties are trying to influence a section of our distributors to demand more and maliciously spreading rumours.”

Mondelez distributors under the banner of the Gujarat Mondelez-Cadbury Distributors Forum stopped all transactions with the company from March 15, pressing 14 demands, several distributors said, while asking not to be identified.