FMCG distributors request Indian regulator to investigate quick commerce platforms
The All India Consumer Products Distributors Federation (AICPDF), India's largest association of retail distributors, has requested Competition Commission of India (CCI) to probe the business practices of Blinkit, Zepto, and Swiggy Instamart. In a letter dated October 18, AICPDF requested the CCI to investigate if these companies are complying with India's FDI norms. The federation also urged steps to shield traditional distributors and small retailers from the platforms' rapid expansion.
AICPDF raises concerns over FMCG distribution practices
The AICPDF has raised concerns over the rapid growth of these platforms, claiming it presents major challenges for traditional retail. The federation noted the practice of FMCG companies appointing quick commerce platforms as direct distributors. The letter argues that this sidelines traditional distributors and threatens the livelihoods of small mom-and-pop stores, disrupting the established FMCG distribution ecosystem.
'Dark stores' and potential FDI violations
The AICPDF has also expressed concerns over the operational models of these platforms, especially their use of "dark stores" or centralized warehouses. The federation argues that this blurs the line between marketplace and inventory-based models, possibly violating FDI regulations that prohibit marketplace entities from holding or controlling inventory. "By exercising significant control over their inventory, these platforms seem to violate the law in both letter and spirit," the letter states.
AICPDF questions ethics of quick commerce platforms
The AICPDF has questioned the ethics of these platforms functioning as Indian companies, while allegedly building monopolistic ecosystems that threaten small retailers and traders. The federation asks if convenience and technology should justify destroying the traditional retail sector. They have also raised concerns over predatory pricing, saying such practices lead to unfair competition, making it hard for traditional retailers to compete or survive.
Similar concerns were raised previously
AICPDF represents four lakh dealers, distributors, and stockists of major FMCG companies like Nestle and Hindustan Unilever across India. The organization has previously raised similar concerns with the Ministry of Consumer Affairs and Commerce Minister Piyush Goyal.
