Distributors urge CCI to probe Blinkit, Swiggy, Zepto
The AICPDF wrote a letter to the Competition Commission of India (CCI), the antitrust regulator, on October 18 urging the CCI to examine if these qcomm platforms adhere to India's FDI regulations or not.
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A probe has been requested into the operational model of quick commerce platforms Blinkit, Instamart and Zepto by the All India Consumer Products Distributors Federation (AICPDF), CNBC reported. As per the report, the AICPDF wrote a letter to the Competition Commission of India (CCI), the antitrust regulator, on October 18 urging the CCI to examine if these qcomm platforms adhere to India's FDI regulations or not.
Reportedly, the federation also urged for protective measures to support traditional distributors and small retailers, while advocating for a dialogue involving FMCG companies, quick commerce platforms, traditional distributors and small retailers. AICPDF pointed out the swift growth of these platforms, stating that it creates major challenges for traditional retail. A primary concern highlighted is the trend of FMCG companies designating quick commerce platforms as direct distributors. "By exercising significant control over their inventory, these platforms seem to violate the law in both letter and spirit," the letter reads.
According to the letter, this practice marginalises traditional distributors and endangers the livelihoods of small mom-and-pop shops, ultimately disrupting the existing FMCG distribution system. The letter further addresses concerns regarding the operational models of these platforms, reflecting issues that AICPDF previously brought to the attention of the Commerce Ministry. One major point of dispute is the utilisation of 'dark stores' (centralised warehouses), which AICPDF argues obscures the lines between marketplace and inventory-based models. This situation could potentially infringe upon FDI regulations, which prohibit marketplace entities from possessing or controlling inventory. AICPDF also raised concerns about predatory pricing, arguing that these practices create unfair competition, making it extremely difficult for traditional retailers to compete or remain viable.
Prior to this, AICPDF has raised such concerns with the Ministry of Consumer Affairs and Commerce Minister Piyush Goyal.
