FMCG Distributors Call For Intervention, Point Out Deep Discounting, Predatory Pricing Policies From Quick Commerce Players

The federation called for authorities to immediately intervene and put in place a temporary hold on new investments in quick commerce players till the CCI finish their investigation

The All India Consumer Products Distributors Federation (AICPDF) sent a letter to the finance ministry and pointed out concerns regarding fund utilisation and accumulation by companies in the quick commerce sector. The fast-moving consumer goods (FMCG) distributors’ association highlighted the issue of deep discounting of goods on the platforms of quick commerce firms to the officials.

The letter from the federation stated that as per its analysis, about 80 per cent of the funds were directed towards customer acquisition strategies, reported Business Standard. The organisation noted that quick commerce entities were raising capital and using it towards deep discounting and predatory pricing.

“Such practices are creating immense pressure on small retailers and distributors who form the backbone of India’s FMCG distribution network. These businesses cannot compete with heavily subsidised prices leading to a significant loss of livelihood for eight crore traditional retail traders,” the letter stated.

The federation called for authorities to immediately intervene and put in place a temporary hold on new investments in quick commerce players till the Competition Commission of India (CCI) and other authorities finish their investigation into the firms regarding FDI regulations, ethical practices, and labour laws.

In the previous month, the distributors’ organisation issued a letter to the CCI and pointed out that there are issues in the traditional supply chain being caused by the swift growth of quick commerce players, such as their appointment by several firms as direct distributors of FMCGs.

The letter further noted, “Develop regulatory frameworks, mandate fair market practices, and ensure that quick commerce platforms operate sustainably and ethically.” The distributors have been asking for an investigation into fundraising/utilisation to make sure deployment is transparent. They also called for implementation of policies to safeguard small retailers and distributors.