FMCG Distributors Allege Unfair Business Practices By Quick Commerce Players, Seek Help From CCI

The All India Consumer Products Distributors Federation (AICPDF) shared concerns about the operating model of the quick commerce players regarding the country’s FDI regulations

The fast-moving consumer goods (FMCG) distributors’ association sent a complaint to the Competition Commission of India (CCI) and alleged that quick commerce players use unfair practices. 

The association flagged business practices such as deep discounting, monopolistic tendencies, and predatory pricing deployed by the entities in the quick commerce industry, reported Business Standard. 

The All India Consumer Products Distributors Federation (AICPDF) also shared concerns about the operating model of the quick commerce players regarding the country’s Foreign Direct Investment (FDI) regulations.

The association said that traditional operators are facing several challenges due to the rapid growth of quick commerce, specifically the appointment of these platforms as direct distributors of FMCG items by multiple firms.

The matter was initially raised by the federation with the government in August, when the AICPDF wrote to the Ministry of Commerce and Industry regarding the swift growth of the quick commerce industry. 

The issue was referred to the CCI by the Department for Promotion of Industry and Internal Trade (DPIIT) in September. The AICPDF noted that practices such as monopolistic tendencies result in unfair competition and this makes it increasingly difficult for traditional retailers to compete or survive in the market.

In its letter, the distributors’ body noted, “Q-com platforms operating dark stores appear to intentionally bypass regulations governing inventory-based e-commerce. We strongly urge the creation of a standard Franchise Act, similar to franchise laws in the USA, to protect the rights of franchisees.”

The association pointed out that by managing major control over the inventory, these platforms appear to be in violation of the law in both letter and spirit.

The trade body urged the CCI to begin a detailed investigation into the operational model of quick commerce players and put in place protective measures for traditional distributors and small retailers.