As per the estimates, there are 52 distributors of Mondelez in the state doing business worth Rs 400 cr per annum.
The Cadbury distributors in Gujarat have gone on a boycott against the Cadbury-maker Mondelez International. The Gujarat Mondelez-Cadbury Distributors Forum has not engaged in any business with Mondelez India Foods Private Limited since six days now over issues ranging from its opposition to expanding distribution network through alleged phantom outlets to GST evasion through these outlets.
As per the estimates, there are 52 distributors of Mondelez in the state doing business worth Rs 400 cr per annum. Trouble has been brewing up between the two since February when the distributors formed a group to begin what they call a non-cooperation movement against the company.
“To show its retail penetration, the company forced each one of us to open multiple outlets periodically and linked incentives to the same. Since beyond a point that was not possible, we were forced to open dummy outlets through a company helpline number. Currently, there are about 10,000 bogus or non-existing outlets in Gujarat alone and we want the company to close them,” a representative from the forum said.
Mondelez India spokesperson said, “These allegations are false and baseless. As an ethical company, we never conduct business in a non-compliant manner. Our relationship – like many in the FMCG industry – is with our distributor partners to whom we sell stock. We work on an auto replenishment mode and our revenue is based on what we sell to these distributors – who in turn sell stock to retailers. No GST benefit can accrue to the company from fake outlets as alleged, since our systems are only enabled to sell to our distributor partners who are GST registered. Any inflation of retail outlets has no positive benefit, directly or indirectly, for our business.”
With GST now in place, distributors concerned feel this vicious cycle will collapse and they may come under tax scrutiny. “Mondelez has been showing expansion at our cost – these are bogus outlets – and are evading GST. We have become risk-managers for the brand and it is time we put an end to the malpractices.”