Upset Over HUL Network Expansion, In MP, Distributors Call For Mass Resignation

FMCG distributors are upset over HUL's expansion of the distribution network in Madhya Pradesh and called for mass resignations, while the leading manufacturer said it is not removing anyone of its current distributors and value relationships with them. The existing distributors of HUL are fearing to lose half of their investments in retail trade, if new distributors are appointed, said their umbrella body AICPDF in a statement on Sunday.

HUL on Sunday put advertisements for the appointment of new distributors for its brands in all major cities in Madhya Pradesh. The company, which owns brands such as Lux, Lifebuoy, Surf excel, Rin, Pond's and Dove, has invited people willing to invest up to Rs 1-3 crore and can arrange a godown with required infrastructure. According to the All India Consumer Products Distributors Federation (AICPDF), because of the said advertisement, HUL's existing dealers are in "sudden panic" and is viewed as "immature and betrayal".

"HUL Distribution Business warrants crores of investments particularly in Extending Credit facilities to Retail Traders for Sustaining and Growing HUL Businesses at risk," said AICPDF adding "If New Distributors are proposed to be appointed, all Existing Distributors will lose a minimum 50% of their investments with Retail Trade." However, issuing a statement, HUL said: "The advertisement relates to expanding our work with General Trade distributors and is not about removing our current distributors.

" "We believe the prospects for general trade business are bright in the region and are looking to partner with distributors to leverage opportunities. We conduct our business fairly and transparently, and our associations with our distributors are bilateral. We value these relationships and will continue to engage with them directly," said a company spokesperson.

In December last year, AICPDF called for the boycott of certain products of HUL in Maharashtra, over issues of the price disparity between the traditional distributors and organised business-to-business channels. However, later in January, it suspended the boycott after talks with the company. The AICPDF claims to represent over 4 lakh distributors and the stockist pan India.

(PTI)