Distributor body AICPDF writes to the CCI, urges probe into Blinkit, Instamart and Zepto

The All India Consumer Products Distributors Federation has written to the antitrust regulator, the Competition Commission of India (CCI), requesting a probe into the operational models of quick commerce platforms Blinkit, Swiggy Instamart, and Zepto, sources say.

In the letter, dated October 18 and accessed by CNBC-TV18, AICPDF urged CCI to investigate whether these platforms are in compliance with India’s FDI norms. The FMCG distributor body also called for protective measures to safeguard traditional distributors and small retailers, while proposing a dialogue between FMCG companies, quick commerce platforms, traditional distributors, and small retailers.

AICPDF expressed concern over the rapid expansion of these platforms, claiming it poses significant challenges for traditional retail. One key issue raised is the practice of FMCG companies appointing quick commerce platforms as direct distributors.

This, the letter argues, sidelines traditional distributors and threatens the livelihoods of small mom-and-pop stores, thereby disrupting the established FMCG distribution ecosystem.

The letter also raises concerns about the operational models of these platforms, echoing similar issues AICPDF highlighted in an earlier communication to the Commerce Ministry.

A particular point of contention is the use of “dark stores” (centralised warehouses), which AICPDF claims blur the distinction between marketplace and inventory-based models. This could potentially violate FDI regulations, which prohibit marketplace entities from holding or controlling inventory.

“By exercising significant control over their inventory, these platforms seem to violate the law in both letter and spirit,” the letter states. It questions the ethics of such platforms operating as Indian companies while allegedly creating monopolistic ecosystems that undermine small retailers and traders. The federation asks whether convenience and technology should justify dismantling the traditional retail sector.

AICPDF also expressed concerns about predatory pricing, stating that such practices lead to unfair competition, making it nearly impossible for traditional retailers to compete or survive.

Representing 400,000 dealers, distributors, and stockists of various FMCG companies across India, AICPDF has previously raised these concerns with the Ministry of Consumer Affairs and Commerce Minister Piyush Goyal.