Indian sellers threaten to disrupt deliveries in protest against Reliance

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A shopkeeper who sells consumer goods shows the JioMart point-of-sale machine from Reliance, which he uses to order supplies for his shop in Sangli, western Maharashtra, India, October 21, 2021. Picture from October 21, 2021. REUTERS / Abhirup Roy / File Photo

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NEW DELHI, Dec. 5 (Reuters) – India’s homewares sellers have threatened to suspend supplies to mom and pop stores if consumer companies Reliance Industries (RELI.NS) sell products at lower prices, according to a letter seen by Reuters.

Reuters reported last month Indian sellers representing companies like Reckitt Benckiser, Unilever (ULVR.L), and Colgate-Palmolive (CL.N) said their sales fell 20-25% over the past year as mom and pop stores increasingly feature Indian ones Billionaires work together to Mukesh Ambani’s trust.

Ambani’s heavily discounted deals prompted more stores to order digitally through its JioMart partner app and posed an existential threat to more than 450,000 corporate sellers who for decades served every corner of the vast country, going from store to store, to take orders.

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Citing Reuters’ story, the All India Consumer Products Distributors Federation – which has 400,000 members – has written to consumer companies demanding a level playing field, saying they must get products at the same prices as other large corporate distributors like Reliance.

If the demand for price parity is not met, the group said in its letter, its sellers will stop selling products to mom and pop stores and will also stop shipping newly introduced consumer goods if those partnerships persist beyond Jan. 1.

“We have built a reputation and goodwill with our retailers by providing them with good service for many years … We have chosen to call a ‘non-cooperation’ movement,” the letter reads.

The group’s president, Dhairyashil Patil, said the letter had been sent to Reckitt, Hindustan Unilever, Colgate and 20 other consumer goods companies.

None of the three consumer companies and Reliance responded to requests for comment.

Corner shops or “kiranas” make a difference 80% of nearly $ 900 billion Retail market in India. Around 300,000 such stores in 150 cities order goods from Reliance, with the company aiming for 10 million partner stores by 2024.

Traditional dealers have told Reuters that they have been forced to cut fleet and staff as their business has suffered from being unable to keep up with Reliance’s prices.

Jefferies estimated in March that Kiranas would steadily increase Reliance’s “sourcing share” “at the expense of traditional distributors”. Such sales for Reliance could grow to $ 10.4 billion by 2025, from just $ 200 million in 2021-22, Jefferies estimates.

(This story removes redundant word in paragraph 3)

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Reporting by Aditya Kalra in New Delhi and Abhirup Roy in Mumbai. Editing by Gerry Doyle

Our standards: The Thomson Reuters Trust Principles.


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