Channel in UP, Uttaranchal complain of cartel

Channel partners across Uttar Pradesh and Uttaranchal are complaining that
distributors like Redington and Ingram Micro are practising cartel formation for
sometime in their region. Annoyed with the cartel form­ation by distributors in
the state, channel partners in Uttar Pradesh are planning to take the issue to
UP Computer Dealer Welfare Association (UPCDWA) level.

“Cartel formation is everywhere. Margins of IT products keep dwindling and
this directly hits our position in the market. At times, we sell HP printers at
a price that is 10 percent lower than the actual rate. Then dealers have to make
up their margin from the sales of other products,” commented Shiv Shankar
Prasad, CEO, Allahabad-based Stek Systems.

According to channel partners in different regions of the state, distributors
keep on changing the rate of cartel and this affects the pricing and
profitability at their end. Parfula Somani of Varanasi-based Jwala Distributors
informed that as the rate of cartel changes, it adversely affects the
profitability and credibility of partners.

“Different dealers sell products at different prices and this affects
reputations in the market. If the prices are compared, customers feel that a
dealer, who has purchased stock at higher rates, is cheating him.” he said.

However, Rohit Kohli, CEO, Kanpur-based Comexcell Technologies informed that
he is not aware of any such cartel formation in his region.

When enquired, officials from Redington did not comment on the matter.