FMCG distributors body, the All India Consumer Products Distributors Federation (AICPDF), has urged the Competition Commission of India to initiate a “comprehensive investigation” into the operational models of quick commerce platforms to ensure that they are in compliance with the country’s FDI norms.

“We have serious concerns about the operational model of these quick commerce platforms in relation to India’s Foreign Direct Investment (FDI) regulations. It appears that some quick commerce platforms are setting up dark stores-centralised warehouses controlled directly by platforms- to blur the lines between marketplace and inventory-based model which is potentially violating FDI regulations that prohibit marketplace entities from holding or controlling inventory,” the industry body stated in its letter sent to the CCI Chairperson, a copy of which was seen by businessline.

The industry body has also raised concerns about alleged practices of “predatory pricing” and “deep discounting” leading to “monopolistic tendencies” by quick commerce platforms.

“Direct distributors”

It also said that the FMCG companies have begun appointing these quick commerce platforms as “direct distributors”, which is jeopardising the livelihoods of small mom-and-pop stores while disrupting the established FMCG distribution network. Hence, AICPDF has also asked for implementation of protective measures for traditional distributors and small retailers to prevent “monopolistic practices.”

The FMCG industry body have also raised concerns about potential violations in terms of “labour law” besides alleging non-compliance of transport regulations by quick commerce platforms. It has also raised concerns about compliance with FSSAI safety standards as these platforms rely on privately-owned two-wheelers.

This is not the first time the distributors federation has raised concerns about quick commerce platforms. Earlier, AICPDC had approached Ministry of Commerce and Industry with its concerns regarding alleged “anti-competitive” practices of quick commerce platforms. The Department for Promotion of Industry and Internal Trade (DPIIT) in the Commerce Ministry has referred this complaint to the CCI.

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