Hindustan Unilever-distributor deadlock in Maharashtra resolved for now

Distributors in Maharashtra have decided to call off their agitation against Hindustan Unilever (HUL) for the next three months. This comes after the company assured them that it will correct the price disparity between traditional trade and the organised distribution channel. 

The apex body of distributors had met with the consumer goods maker on Monday to discuss the issue of price disparity between traditional and organised trade of distribution. Organised trade includes the likes of Jiomart, Booker and ecommerce distributors like Elastic Run and Udaan. The apex body said in a note, “It (HUL) considers distributors as an important component of the distribution system. It will take a serious decision / corrective action on the issue and will protect their distribution channel interests.” 

Distributors have also been asked to communicate any issue of price disparity — if it persists — with proof. 

If the situation does not change on ground over the next three months, then the apex body of distributors may take fresh action.  

Distributors in the state have agreed to supply HUL products, which they had planned to stop in phases. 

On Monday, in an email response to Business Standard’s query, the maker of Lux soaps said, “In response to the request we had received from AICPDF (The All India Consumer Products Distributors Federation), company representatives met them (members) to understand their concerns and take feedback about the evolving route-to-market (RTM) models.”

HUL reiterated, “General trade continues to be our largest channel and our distributors (redistribution stockists) will remain our valued partners in our quest to serve the needs of our consumers across India.”

However, distributors are not selling Colgate-Palmolive India’s (Colgate India’s) MaxFresh range of products in Maharashtra as the company has not yet come forward to discuss the issue. 

In a stock exchange filing, Colgate India said, “We would like to clarify that the company has not, so far, engaged with the AICPDF.”

It also said that it is directly engaging with its distributors to resolve their challenges.

Colgate added, “The company is not aware of any information in this regard (distributors decision to stall supply of Colgate MaxFresh range of products) which requires disclosure to exchanges. Further, there is no material impact of the news article (Business Standard reported on Saturday that distributors in Maharashtra will stop supplying Colgate India’s products in phases) on the company. The company will ensure that supply of its products remains uninterrupted in the state.”

The trade body said, “The movement against Colgate is still going on and the intensity will be increased. The company still sticks to its obstinate attitude.” The traditional supply chain in the state had earlier decided it would stop the sale of Colgate Vedshakti products eight days later after it stopped MaxFresh.

From mid-January, it plans to stop the sale of toothbrushes followed by complete halting of all Colgate products.