FMGC distributors bear the brunt of unequal discounts

Bangalore Business

Distressed over the growing popularity of online retailers’ sale offers, the Karnataka State FMGC (Fast-moving consumer goods) distributors’ Association resort to protest on February 28, near Freedom Park.

By Neetu Saini

As the clock ticks noon, GN Chaudhary, a cosmetic product distributor sits on the counter waiting for his first customer to make his “Bouni.” 

Slamming the online retail offers and discount provided to customers, the distributors and retail store owners say that by charging less, companies like Amazon, Flipkart, Dmart, Myntra and other B2B e-commerce sites are trying to create monopoly in the market. 

“The FMGC companies are being discriminatory against the distributors, as they give more discounts to the online retailers compared to the traditional distributors. On a particular product, an MNC gives us between 15-20 per cent of discount, whereas online retailers like Amazon, Flipkart etc. get around 40-50 per cent discount,” said Chaudhary. 

“We at the ground level are facing liquidity crunches, as most of our customers have turned to online customers,” he added.

The offline retailers of Karnataka are juggling tough between retaining their customers and keeping up with the online retailers, who have managed to influence a great chunk of Indian market, and seek a uniform trade scheme from the Central government to practice fairly and avoid discriminatory pricing in the market.

“We want a trade board to be formed for regulatory, that will do justice to the tax we as distributors have paid over the period of time to the government,” said R Jayanth Ganig, President of Karnataka FMGC Welfare Association.

Agitated by government’s delay the distributors have planned to demonstrate a protest on February 28, near Freedom Park where thousands of traders and retail stores owners from all over state have called for a day shut-down to stage a protest owing to steep discounts and promotional activities provided by e-commerce services.

 “At the event we are expecting at least 10-15 thousand people along with retailer store owners and distributors from different taluks and districts,” said Jayanth.

Afraid of losing their stand in the market, wholesalers and distributors are left with no other choice but to discontinue purchases from the FMGCs that don’t provide equal discounts, said Kishore Babu, KFWDA Secretary.

KFDWA Secretary added, “We have also sent three memorandums pertaining to the same issue to Union minister Piyush Goyal and Finance Minister Nirmala Sitharaman, but till date nothing has been done in favor of us.”

“Government must understand that in a country like India, where people are largely dependent on small kirana shops the distributors plays a vital role in supplying products from big companies,” added the president of KFDWA.

Earlier this month on February 9, the members of Karnataka FMCG distributors’ welfare association staged a protest at town hall against a general mill which had lay off 16 distributors from its list.