COMMENTARY
INTERVIEW
SPECIALS
CHAT
ARCHIVES

Kerala traders, HLL relent to end war

D Jose in Thiruvananthapuram

The traders and Hindustan Lever Limited both had to climb down to end the five-month-old row between them. The traders union, the Kerala Vyapari Vyavsayi Ekopan Samithi', on November 5, called for an end to the boycott of HLL products.

Thought both sides are claiming victory, the reality is different. The consumer products multinational, which had originally refused to consider any hike in the traders' margin, relented to a one per cent increase, calling it trade promotion allowance, and also agreed to examine the trade profitability with a bias to traders within the next three months.

The KVVES, for its part, did not insist on its earlier demand for increasing the margin percentage from 4.5 to 8.75. However, the traders are optimistic that HLL will concede their original demand after the study, to be conducted by a third party, is carried out.

HLL executives in Bombay refuse to term the trade promotion allowance as a hike in the trade margin. A senior HLL manager said that the increase was only an allowance that the company usually offers to the traders during the festival season.

The company spokesman said that the HLL had not budged on its stand that there would be no direct negotiation and no compromise. He insisted that the company had not negotiated with the KVVES and there was no settlement whatsoever. The spokesman asserted that KVVES had withdrawn the boycott consequent to the direction by the Monopoly and Restrictive Trade Practice Commission to end the boycott within a week.

However, an official statement issued at Cochin by HLL gives a different picture. The statement confirmed the hike in the commission by one per cent with effect from November 5, and the decision to appoint a neutral agency to go into the total aspect of trade profitability.

Sainuddin, KVVES Thiruvanthapuram unit president, said that the agreement was reached following discussions between the association president, Nasiruddin, and a senior HLL official in Coimbatore on November 1. He said that the meeting was arranged at the behest of a Kozhikode-based carry and forward agenct (C&FA) and claimed that the offers came directly from HLL. He said that KVVES had accepted the offer as a preliminary gesture towards reconciliation.

KVVES sources said that the contradictory statements being made by HLL is part of a tactic to save its face. The source said that the company had agreed to resort to direct negotiation after they suffered a loss of over Rs 1 billion due to the boycott in Kerala. Moreover there was the threat of the boycott spilling over to Tamil Nadu and Karnataka.

Hindustan Lever had tried to resolve the crisis through the intervention of the Kerala government. However, neither the talks the state food minister or the chief minister had with the traders helped in resolving the row. Even the government's effort at letting HLL sell its products throught the government retail outlets were of little help in preventing HLL's drop in revenues. Incidentally, the Communist government was criticised by the traders and opposition parties for going out of its way to help the multinational.

Nevertheless, the traders too were apparently looking for a face-saving formula to end the crippling strike. The gesture from the HLL came in handy for the strike-weary traders who immediately accepted it and withdrew the boycott. The KVVES was also worried about a possible crack in the association, which has over 100,000 units throughout the state, especially after the Monopolies commission's intervention. In fact, a section of the KVVES members had defied the diktat and had bugun hawking products at their outlets.

The Kerala traders' association was also facing considerable criticism from consumer organisations, some of which threatened to move court. The HLL offer, which came at a time when support from political parties and trade-related organisations had started waning, was thus most opportune.

EARLIER REPORTS:
Traders down shutters in Kerala in battle against Hindustan Lever
Kerala traders agitation floundering in face of govt-HLL tie-up
Traders' war with HLL intensifies