FMCG distributors: HUL products to be boycotted in Maharashtra
FMCG distributors: HUL products to be boycotted in Maharashtra
On Thursday, FMCG distributors who were demanding that the top manufacturer HUL restore its previous margin structures threatened to boycott the company’s products in Maharashtra, beginning with Taj Mahal Tea.
The distributors went on to threaten to boycott the Kissan brand, the top detergent brand Rin, and the Taj Mahal tea brand going forward if the company did not respond to their demands.
Owner of the Lux, Lifebuoy, Surf Excel, Rin, Pond’s, and Dove brands, HUL has increased the variable margins for its distributors by up to 100 to 130 basis points while decreasing the fixed margin by 60 basis points.
The distributors are requesting a five percent basic margin as a minimum. Although they are supporting incentive parameters, the distributor’s margin shouldn’t be impacted by them. The distributors’ umbrella organization, the All India Consumer Products Distributors Federation (AICPDF), is unhappy with the new margin structure.
The Maharashtra Consumer Products Distributors Federation (MSCPDF) released a statement on Thursday, according to which the AICPDF began its non-cooperation against HUL on January 11 by boycotting its products, beginning with Taj Mahal Tea.
The Taj Mahal Tea brand will remain inactive until January 25 according to MSCPDF, at which point it should be kept in frozen so that it does not get booked and billed. But, according to MSCPDF, Kissan brand and Taj Mahal tea will be inactive / frozen from January 25 to February 10 if the company does not pay attention to our legitimate demand.
MSCPDF said that products under HUL’s leading detergent brand, Rin, along with Taj Mahal and Kissan brands, will be inactive from February 10 to February 25 if a solution is not found even after this.
The federation added that starting on March 1, a national movement will be launched in every state, accompanied by a dharna involving 1,000 distributors in front of HUL’s headquarters in Mumbai.
Week by week, this movement will begin in Maharashtra and move to other parts of the nation, an AICPDF statement stated, adding that by February, between 1,500 and 2,000 distributors from other regions of India are anticipated to take part.
Fixed margins and variable margins are the two main incentive programs offered by FMCG companies. The majority of businesses offer both variable and fixed margins, which vary based on various criteria like performance. Fixed margins range from 450 to 600 bps. According to AICPDF, over 4 lakh distributors and stockists nationwide are represented.
AICPDF and HUL had been at odds for the previous two years over margin parity between cash-and-carry players and business-to-business platforms. On January 4, 2022, it called for a boycott of HUL products, which was subsequently called off.
