The All India Consumer Products Distributors Federation (AICPDF), which represents over 400,000 retail distributors, has expressed serious concerns about the pricing practices of quick commerce firms. In a letter addressed to FMCG brands, AICPDF highlighted what it described as an 'alarming' trend of predatory pricing and deep discounting by these firms, as per reports.
The federation claims that these deep discounting strategies are undermining the traditional distribution network and eroding the value of established FMCG brands. The federation argued that such practices create unrealistic expectations among consumers regarding product pricing, making it difficult for traditional retailers to compete.
The federation warned that small and medium-sized retailers lack the financial capacity to match these heavy discounts, which places them in a precarious position. Many retailers, the federation noted, are being pushed to the brink of survival due to these practices, which have created an unfair competitive landscape.
In its letter, the federation issued a warning to FMCG companies, urging them to take immediate action against these 'harmful practices'. The federation cautioned that, if no corrective measures are taken, it will have no choice but to initiate a mass non-cooperation movement against the FMCG brands involved.
Dhairyashil Patil, National President of AICPDF, emphasised that such a disruption would have negative consequences for all stakeholders in the FMCG industry. He expressed hope that the situation could be resolved without the need for drastic measures but reiterated the importance of taking these concerns seriously.
Patil also pointed out that the predatory pricing tactics employed by quick commerce firms devalue the hard work and loyalty of long-standing distribution partners. He raised concerns about the long-term sustainability of the market, warning that these practices threaten to disrupt the carefully nurtured relationships between distributors and FMCG companies that have been built over decades.
The federation called on FMCG brands to closely monitor the impact that quick commerce firms are having on traditional distribution and retail networks. It urged FMCG players to assess whether these platforms are causing harm to the established supply chain and to take steps to maintain the delicate balance between traditional retailers and the emerging quick commerce sector.
It also appealed to FMCG brands to ensure that their partnerships with quick commerce firms do not disrupt the traditional retail system. The federation emphasised the importance of protecting the long-term interests of traditional distributors, who have been key to the success of FMCG brands over the years.
This letter comes on the heels of a recent complaint filed by the federation with the Commerce Ministry and the Department for Promotion of Industry and Internal Trade (DPIIT). The complaint alleges that certain quick commerce firms are violating Foreign Direct Investment (FDI) regulations by operating inventory-based models, which are prohibited under Press Note 2 of India’s e-commerce policy. The federation has called for greater regulatory oversight to ensure compliance with these regulations and to protect traditional distributors from unfair competition.
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