FGDA warns FMCG companies to stop distribution of their products in Gujarat, demands parity of margin with malls

Ahmedabad: The Federation of Gujarat FMCG (Fast Moving Consumer Goods) Distributors Association (FGDA) today warned that if the FMCG companies did not give similar margins like that given to various malls to the 5000 odd distributors of this western state,they would stop the distribution of their products to retail network.

Talking to newsmen here on the sidelines of the meeting of the Federation to discuss various measures to deal with the margin disparity and other issues, its Chairman Arun Parikh said that the Malls were getting a much higher margin of 21% from FMCG companies while that for a retailer was 9% and distributor was 4.5%.

‘So over all the retailer-distributor are getting 7.5% less margin. Because of this the retail business was shrinking day by day. The Malls and online e-commerce players sell many of the products at very cheap rates which could not be matched by the retailers due to difference in the margin. We are going to write to the over 250 FMCG companies to end this disparity or else we would stop distributing their products. We will give them 45 days for course correction,’ he said.

Parikh also said that the federation has also raised the issue of one time lump sum pension to the distributors who have attended the age of 60 years. It should be 0.25% of the total business given by the distributor to the company during his active years.

‘We will also raise the issue of a similar lump sum pension from the government on the tax paid by a distributor during his/her lifetime,’ Parikh said.

DeshGujarat