Colgate-Palmolive India said on Tuesday that it was in negotiations with its Indian sales agents after they threatened to disrupt supply in one of the country’s most populous states, alleging that they were being treated unjustly on price.
According to Reuters, Indian sales agents for businesses such as Reckitt Benckiser, Unilever, and Colgate saw a 20 per cent to 25 per cent reduction in sales over the previous year as mom-and-pop stores collaborated with Indian billionaire Mukesh Ambani’s Reliance to achieve lower rates.
Following the article, sales reps threatened to stop supplying the mom-and-pop shops, known as kiranas in India, unless they were granted the same price breaks as major corporate distributors like Reliance.
Last Monday, a group of distributors in western Maharashtra, India’s richest and most populous state, announced that they would cease selling select Colgate products on January 1st. Colgate-Palmolive India claimed in a statement to Indian stock markets that “it is directly engaged with its distributors to fix their concerns” but did not elaborate.
“The firm will ensure that supply of its products is maintained in the state,” according to the statement. According to Reuters, Ambani’s price cuts encouraged more companies to shop online through his JioMart Partner app, posing an existential threat to the more than 450,000 salespeople who had been going from store to store for decades to take orders.
According to a November Reuters investigation of purchasing bargains via the JioMart Partner app, a Mumbai shop could bulk buy a two-tube box of Colgate MaxFresh toothpaste for approximately 115 rupees ($1.55), while a traditional Colgate sales agent sold it for 154 rupees, nearly a third more.
The All India Consumer Products Distributors Federation announced last week that its members will stop supplying the MaxFresh brand in Maharashtra on January 1st and that additional product shipments would be disrupted subsequently. According to the organisation, Maharashtra accounts for nearly 40% of all consumer goods sales in India.
The Colgate-Palmolive Firm is a global consumer goods company located on Park Avenue in New York City’s Midtown. It is a manufacturer, distributor, and provider of home, health care, personal care, and veterinary products.
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