Local distributors allege Mondelez for unfair business practices

5 April, 2018

 

The Gujarat Mondelez-Cadbury Distributors Forum has stopped all transactions with the Mondelez India from March 15, asking for fulfillment of 14 demands. And this is the reason for disappearance of stocks of Cadbury chocolates and other Mondelez India products in Gujarat from the shelf and shops. A deadlock has happened over allegations by local distributors about unfair business practices. 

Mondelez has denied the accusations, but the news is that the dispute may now spread to Delhi, Andhra Pradesh, West Bengal, Maharashtra, Haryana and Telangana. 

President of the Federation of All India Distributors’ Associations, H Krishna, alleged the company is forcing distributors in Gujarat to carry on business with dummy outlets, which are not approved by the food regulator or closed outlets that continue to exist in its database. 

Krishna also alleged that Mondelez is compelling the distributors to conduct sales to outlets that do not have a licence from the Food Safety and Standards Authority of India.

But Mondelez denied that it is coercing its trade partners to operate dummy accounts. Its spokesperson informed that their relationship – like many in the FMCG industry – is with their distributor partners to whom we sell stock and work on auto replenishment mode revenue is based on what we sell to these distributors  who in turn sell stock to retailers. And the company never conducts business in a non-compliant manner.

In fact the spokesperson stressed that Inflation of retail outlets has no positive benefit for the company, the. Mondelez has constantly sought information from distributors about the alleged fake outlets so that they could be investigated. 

Replying to claims of forced trade, changing stock norms and discriminatory margins, the Mondelez spokesperson said they have addressed all key concerns of our distributor partners during our various discussions including those of margins which were evaluated just a few months ago. Despite this, certain external parties are trying to influence a section of our distributors to demand more and are spreading rumors maliciously.

Various other state FMCG forums have pressed for rectification of Mondelez’s business practices. As the appeals from Gujarat distributors are very sensitive and serious we are under assumption that this may happen in our state also, we advise you to take correction immediately, failing which we will be compelled to start noncooperation in our state also,” state FMCG associations wrote to Mondelez in identical letters.

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