Aditya Kalra & Abhirup Roy

NEW DELHI, (Reuters) – Indian household goods sellers have threatened to stop supplies to small-scale stores if Reliance Industries receives products from consumer companies at lower prices. This is according to a letter Reuters received.

Reuters reports that Indian salespeople representing Reckitt Benckiser (NYSE) and Unilever (NYSE) reported their sales dropped by 20-25% last year because mom-and-pop shops were becoming more involved with Indian billionaire MukeshAmbani’s Reliance.

Ambani’s highly discounted items were motivating more stores to order digitally via his JioMart Partner application, which was posing a serious threat to the more than 450,000 company-salesmen who had for decades gone store-to–store in order to receive orders.

The All India Consumer Products Distributors Federation, which boasts 400,000 members, has requested a level playing field. They have written to consumers companies requesting the same price as other large corporate distributors like Reliance.

The group stated in a letter that if the price-parity demand for products is not satisfied, it would stop selling to small- and medium-sized stores. It will not also supply new consumer goods to those who have continued such partnerships beyond January 1.

The letter stated that “We have built a reputation for ourselves and our customers by providing excellent service over many years… We have decided not to cooperate with them.”

Dhairyashil Patel, president of the group said that the letter had been sent to Reckitt (Hindustan Unilever), Colgate and other consumer goods firms.

Reliance was the only company that did not respond to requests for comment.

Indian mom-and-pop shops, also known as “kiranas,” account for almost 80% of the nearly $900 billion retail sector. Reliance has set a goal of 10,000,000 partner stores, which is approximately 300,000.

Reliance’s prices have forced traditional distributors to reduce their staff and vehicle fleet, Reuters has learned.

In March, Jefferies (NYSE 🙂 estimated that kiranas would “steadily increase procurement” from Reliance at “the cost of traditional distributors”. Jefferies predicts that Reliance sales will rise to $10.4billion by 2025, from only $200m in 2021-22.