In the letter, dated October 18 and seen by CNBC-TV18, AICPDF urged CCI to investigate whether these platforms comply with India’s FDI norms. The consumer goods distribution body also called for protective measures to safeguard traditional distributors and small retailers, while proposing a dialogue between consumer goods companies, fast commerce platforms, traditional distributors and small retailers. retailers.
AICPDF expressed concern over the rapid expansion of these platforms, stating that it poses significant challenges to traditional retail. A key issue raised is the practice of FMCG companies appointing quick trade platforms as direct distributors.
This, the letter argues, sidelines traditional distributors and threatens the livelihoods of small mom-and-pop shops, thereby disrupting the established consumer goods distribution ecosystem.
The letter also raises concerns about the operating models of these platforms, echoing similar issues that AICPDF highlighted in a previous communication to the Ministry of Commerce.
A particular point of controversy is the use of “dark stores” (centralized warehouses), which the AICPDF says blur the distinction between market-based and inventory-based models. This could potentially violate FDI regulations, which prohibit market entities from holding or controlling inventory.
“By exerting significant control over their inventory, these platforms appear to violate the law in both letter and spirit,” the letter states. It questions the ethics of such platforms that operate as Indian companies and at the same time create monopolistic ecosystems that undermine small retailers and traders. The federation asks whether convenience and technology should justify dismantling the traditional retail sector.
AICPDF also expressed concern over predatory pricing, stating that such practices lead to unfair competition, making it almost impossible for traditional retailers to compete or survive.
AICPDF, which represents 400,000 traders, distributors and stockists of various consumer goods companies across India, has already raised these concerns with the Ministry of Consumer Affairs and Commerce Minister Piyush Goyal.
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