Indian salesmen threaten to disrupt supplies to mom-and- pop stores

NEW DELHI Reuters - India's household goods salesmen have threatened to disrupt supplies to mom- and pop stores if consumer companies don't provide products at lower prices to Reliance Industries, according to a letter seen by the company's salesmen.

The last year, a Reuters report last month, Indian salesmen representing companies such as Reckitt Benckiser, Unilever and Colgate-Palmolive said their sales had dropped 20 -- 25%, as mom-and- pop stores were partnering with Indian billionaire Mukesh Ambani's Reliance.

Ambani's deeply discounted offerings have caused more stores to order their digitally from his JioMart Partner app, posing an existential threat to more than 450,000 company salesmen who have served every corner of the nation for decades by going store-to-store to take orders.

According to the Reuters story, the All India Consumer Products Distributors Federation, which has 400,000 members, has written to consumer companies asking for a level playing field, saying they must get products at the same prices like other big corporate distributors such as Reliance.

If the pricing-parity demand is not met, the group said in its letter that its salesmen will stop distribution of products to mom- and pop stores, and will not supply newly launched consumer goods if partnerships continue beyond January 1.

The letter said that we have earned reputation and goodwill among retailers by giving them good service for many years. We have decided to call it a 'Non-Cooperation' movement.

The letter was sent to Reckitt, Hindustan Unilever, Colgate and 20 other consumer goods companies, according to the group's president, Dhairyashil Patil.

None of the three consumer companies, as well as Reliance, responded to requests for comment.

Mom-and- pop stores or Kiranas account for 80% of the retail market in India. The company has set a target of 10 million partner stores by the year 2024, with over 300,000 such stores in 150 cities ordering goods from Reliance.

Traditional distributors have told Reuters they have had to cut vehicle fleet and staff because they can't match Reliance's pricing.

Jefferies estimated in March that Kiranas will increase the share of procurement from Reliance at a cost of traditional distributors. According to Jefferies, sales for Reliance could grow to $10.4 billion by the year 2025 from just $200 million in 2021-23.