Distributors of FMCG products in the state, who have long suffered at the hands of big supermarkets providing deep discounts and offers, have come together to demand parity in rates at which products are sold.
The Federation of Gujarat FMCG Distributors held a meeting of its members on Sunday, whereby it was decided to write to FMCG companies asking for parity.
Federation chairman Arun Parikh said, "We will give them one month to act on our concerns. If they fail to do so, we will boycott all products that are given to big retailers at lower prices."
He added that they have raised the matter informally in the past, but nothing came of it. "We also gave a memorandum to the district collector two weeks ago, but nothing happened," Parikh added.
Explaining how the supermarkets are able to give deep discounts, Parikh said that a product that costs Rs 10 is sold to the distributor for Rs 8.68, while the retailer gets it at Rs 9.09. "But the supermarkets get it at Rs 7.45. As a result, they pass on the discounts to the customers, something we cannot. It's because of this reason that they even sell two for the price of one or offer other freebies," Parikh said.
He added that there were other concerns too, as companies have benefited from scrapping of taxes following GST's implementation. "The new GST rates have benefited the company, but not distributors or the general public, since companies continue to sell products at earlier rates," he said.
A LOSING BATTLE
- The FMCG distributors claim a product that costs Rs 10 is sold at Rs 7.45 to supermarkets, while they pay Rs 9.09.
- This allows the former to pass on the discounts to the consumer, or offer freebies and other goods with their products.
