Reckitt takes action to quell price dispute in India

A worker inspects boxes of Reckitt Dettol hand wash basins at a distributor warehouse before loading them onto a truck for delivery to retailers in Mumbai, India on September 17, 2021. REUTERS / Francis Mascarenhas

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NEW DELHI, January 5 (Reuters) – British consumer giant Reckitt Benckiser has sought to allay concerns of its army of sales agents in India over unfair prices, saying it has taken steps to ensure rules fair play for distributors, a letter seen by Reuters showed.

The insurance follows a Reuters article in November that revealed sales agents from companies such as Reckitt, Unilever (ULVR.L) and Colgate were angry that mom-and-pop stores – known as of kiranas in India – were increasingly ordering the mobile app from Indian retailer Reliance because they could get lower prices.

In a letter dated December 20 to a key business group of 400,000 consumer goods sales agents, Reckitt said he had taken steps to ensure a “fair game” for all of his business partners as he was looking to solve their problems.

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There are hundreds of thousands of consumer goods distributors going from store to store in India to take orders from kirana outlets and they are the key to the success of companies like Reckitt in trying to reach 1.3 billion inhabitants.

Agents said the companies risked supply disruptions if they did not ensure price parity for all distributors.

“We have been extremely careful and discourage any unsustainable business with other distribution partners,” Reckitt said in a letter to the Indian Federation of Consumer Products Distributors (AICPDF).

“Any violation is immediately reported and stopped,” he added, without naming Reliance or any other major distributor.

Reckitt – the maker of popular brands like Dettol and Durex – did not comment on the letter, but in a statement to Reuters said India is one of its top three markets and is in constant dialogue with distributors to maintain an equitable relationship with all of them.

“Our distributors have always been an integral part of our business,” the statement said.

AICPDF President Dhairyashil Patil said he “follows the words of the company” for now and hopes Reckitt will be able to level the playing field.

Reliance, run by billionaire Mukesh Ambani, has long-standing relationships with consumer products companies like Reckitt, as it also operates 1,100 supermarkets in the country.

Jefferies estimated last year that Kiranas “will steadily increase the share of” Reliance “purchases at the expense of traditional distributors.” Such sales for Reliance could reach $ 10.4 billion by 2025, compared to just $ 200 million in 2021-2022, Jefferies estimates.

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Reporting by Aditya Kalra in New Delhi; Editing by Elaine Hardcastle

Our Standards: Thomson Reuters Trust Principles.

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