The Federation of Distributors of Consumer Products All India (AICPDF), which is a federation of distributors, filed a matter against fast trade companies on Thursday with the Competition Commission in India.
According to sources, the AICPDF has deposited a petition alleging anti -competitive practices against fast trade companies, notably Zepto, Blinkit, Bigbasket and SWIGGY Instamart for a deep discount and called for their regulations.
According to its website, AICPDF is a non -governmental organization including various dealerships, distributors and resellers of all FMCG companies as members of the association.
“All other professional associations will also deposit similar petitions with the ICC against fast trade companies,” said a person familiar with development.
In its petition, the AICPDF would have raised concerns about the uncontrolled growth of fast trade companies and their impact on small Kirana stores.
“No one is against fast trade or electronic trade companies. But they must coexist and also leave the traditional source of brick and mortar stores, “said the source, noting that several stores close, because more and more consumers prefer to order via these applications according to the discounts they offer. “It also leads to a loss of livelihoods. Meanwhile, the discounts granted by these companies are based on a model of cash burns, ”argued the source.
According to an Elara Capital report, the petition has asked the CCI to regulate fast trade platforms on an alleged price reduction and requested a minimum support price (MSP) on the maximum retail price (MRP), citing a negative impact on KIRANA stores in level 1 cities.
“The AICPDF has requested 1) a price of 10% on MRP for FMCG products, 2) a floor of 2 to 3% on MRP for non-FMCG, and 3) control of offers and reductions in electronic and QC platforms,” said the report. He said, however, that the execution of these requests is very unlikely, given that in the world, there is no MSP concept for FMCG products, the price of the soil can delay investment in electronic and startup activities, and it is counter-intuitive to contain inflation.
Concerns about the rise of fast trade and electronic commerce and their impact on traditional stores have been raised several times in the past by several retailers and associations of distributors on issues such as deep discounts, predatory prices as well as fast delivery models. Previously, the AICPDF had written to the exhorting CCI to launch a complete survey on the operational models of fast trade platforms and if they comply with foreign direct investment standards.
