Quick commerce: All India Consumer Products Distributors Federation knocks on CCI door

The All India Consumer Products Distributors Federation (AICPDF), which is a distributors’ federation, has on Thursday filed a case against quick commerce firms with the Competition Commission of India.
According to sources, AICPDF has filed a petition alleging anti-competitive practices against quick commerce companies including Zepto, Blinkit, BigBasket and Swiggy Instamart on the grounds of deep discounting and has called for their regulation.
As per its website, AICPDF is a non-government organisation comprising various dealerships, distributors and stockists of all FMCG Companies as Association Members.
“All other trade associations will also file similar petitions with the CCI against quick commerce firms,” said a person familiar with the development.
In its petition, the AICPDF is understood to have raised concerns over the uncontrolled growth of quick commerce firms and their impact on small kirana stores.
“No one is against quick commerce or e-commerce companies. But they must co-exist and let traditional brick-and-mortar kirana stores function as well,” said the source, noting that several stores are closing down as more consumers are preferring to order through these apps based on the discounts they offer. “This is also leading to loss of livelihood. Meanwhile, discounts given by these companies is based on a cash burn model,” the source contended.
As per a report by Elara Capital, the petition has asked the CCI to regulate quick commerce platforms over alleged price-cutting and demanded a minimum support price (MSP) on Maximum Retail Price (MRP), citing adverse impact on Kirana stores in Tier 1 cities.
“AICPDF has demanded 1) a 10% price floor on MRP for FMCG products, 2) a 2-3% floor on MRP for non-FMCG, and 3) control on eCommerce & QC platforms’ offers and discounts via regulations,” the report noted. It however said that execution of these demands is highly unlikely, given that globally, there is no MSP concept for FMCG products, floor to price may retard investment in eCommerce and startup activities, and it is counter-intuitive to containing inflation.
Concerns over the rise of quick commerce and e-commerce and their impact on traditional stores have been raised repeatedly in the past by several retailers and distributors associations on issues including deep discounting, predatory pricing as well as quick delivery models. Previously too the AICPDF had written to the CCI urging it to launch a comprehensive investigation into operational models of quick commerce platforms and whether they are in line with foreign direct investment norms.