Distributors in Maharashtra are at loggerheads with Rs 6,114-crore Wipro Consumer Care and Lightning Ltd. over inventory issues and payments for damaged stock.
More than 90 percent of consumer goods maker's 400 stockists in the state have stopped supplying its products for about two months, Dhairyashil Patil, president of the state distributors' association, told BloombergQuint.
The Maharashtra State Consumer Products Distributors Federation also wrote a letter to the maker of Santoor soaps and Wipro baby products highlighting their concerns in February. BloombergQuint has obtained a copy.
Distributors are a key element in India's customer trade as hypermarkets and superstores that buy directly from companies comprise just 9 percent of the $660-billion market. Smaller retailers and wholesalers source products through them.
Wipro Consumer Care, however, denied stockists have stopped selling its products. “There is no such incident reported by our field team. Santoor continues to be No. 1 soap brand in Maharashtra,” the company said in an emailed statement to BloombergQuint. “There is no impact on our business in the state.”
One of the concerns highlighted by its distributors is payment for the damaged items and products past their shelf life.
“The company takes a long time to pay off claims for damaged goods unlike other FMCG companies,” Rajendra Agarwal, a distributor with Wipro Consumer from Amravati, told BloombergQuint. “It takes approximately five to six months, while other companies do it within a month.”
Distributors' other concern is excess inventory. The average number of inventory carrying days for Wipro Consumer's stock stands at 30-45 days, according to the federation's letter. That compares with 15 days earlier, Sunil Bhatia, a distributor from Nagpur, said.
Despite asking the company to reduce the number of inventory days by lowering supplies, the company hasn't responded, Agarwal said.
This is not the first time that Maharashtra stockists are locked in a dispute with the company. They had voiced similar concerns in 2014 and Wipro Consumer resolved them.
This time, Patil said, it's yet to address their issues.
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