THIRUVANANTHAPURAM, November 7: The anticlimax of the much discussed boycott of Hindustan Lever Ltd's (HLL) products by Kerala Vyapari Vyavasayi Ekopana Smithi (KVVES) which was abruptly withdrawn on Sunday last, after four months of agitation embarrassing not only the consumers in the state but also the state government, has posed several intriguing questions.

What prompted the Kerala traders to call off the state-wide boycott of HLL products is yet to be explained rationally by either KVVES or HLL. Both the parties claim that they won the battle. For HLL, it was victory hands down, according to the company sources, for the withdrawal of the agitation was unconditional. The multinational also takes pride in the fact that till the end it stood by its stand that there would be no direct negotiation and no compromise.

But KVVES asserts that the agitation was called off on the basis of certain offers made by HLL, which among other things included a one per cent trade promotion scheme for retailers and wholesalers for a period of three months on key brands of HLL. Also, according to KVVES, HLL had offered to conduct a study by a third party on the trade profitablity in its totality.

Now HLL headquarters in Mumbai strongly denies the above claims by KVVES leaders. "HLL never negotiated with KVVES and there was no settlement whatsoever," a company spokesman told the Financial Express over the phone on Wednesday. He attributes the abrupt withdrawal of the agitation to the MRTP Commission's directive. "MRTPC had asked KVVES to call off the boycott within a week's time," he pointed out.

Therefore, according to HLL sources, any claim by KVVES is only to save face. About the one per cent trade promotion scheme, he said it was only a routine offer during festival season. But contradicting the Mumbai office, an official statement by HLL issued in Kochi on Wednesday confirmed the one per cent hike in commission for key brands for three months from November 5 and the proposed study to expand the Kerala market for HLL brands. The statement also congratulated the State Government for its efforts to settle the dispute.

KVVES president Nasirudeen is however emphatic. "Myself and KVVES secretary Hassan Koya did have discussions with a senior HLL official at a late night meeting in Coimbatore on November 1. The company not only offered to appoint an external party to review the margins offered on HLL products, but also offered a 25 per cent hike in the present margins given to the HLL retailers and distributors. This revised margin-structure is to stay for a three-month period by which time the review report would be ready. As a preliminary gesture towards reconciliations, we found the settlement offer acceptable," says the KVVES chief.

Another KVVES leader said that the meeting was arranged in Coimbatore only because HLL people were reluctant to meet the traders anywhere in their homestate. "It was the Kozhikode-based KRS Ltd, the C&F agents for HLL, who fixed up the meeting. This firm too had been under threat of a boycott by KVVES for being an HLL associate. It was the third time that they had tried for a reconciliation. Nitin Paranjpei, a top-ranking HLL manager in Chennai had met the KVVES office-bearers," he said.

HLL had been trying to get the State Government to deal with the militant traders in Kerala. For HLL, a boycott of its products by majority of dealers in a State was the first experience. There was also the threat of the boycott being extended to neighbouring Tamil Nadu and Karnataka with the co-operation of the respective trade bodies there. Chief Minister E K Nayanar himself had mediated with HLL and KVVES representatives last month but failed. A similar attempt was made earlier by State Civil Supplies Minister E Chandrasekharan Nair.

The over-enthusiasm shown by the LDF Government in the HLL issue had earned the ruling front some illwill too. There was even an allegation by the Opposition that the Left-led government was wooing the multinationals company for favours received.

The State Government should also have started feeling the pinch as the boycott resulted in a revenue drop which is yet to be quantified. HLL had admitted at a news conference in Kochi in August last week that they had a drop of Rs 90 crore in Kerala turnover. At this rate the four-month-long agitation must have cost it dearly, at least by Rs 120 crore. This was despite the strong support by State Government by leaving open the State sponsored retail outlets of the civil supplies and cooperative departments to HLL products.

The KVVES president said the uniqueness of the Coimbatore meeting was that it was the first time that HLL was willing to have a direct meeting with the traders. "There was no Government or other intermediaries," he said. A vital question that haunts the KVVES rank and file is why their leaders had not agreed to the same package of settlement clauses when they were forwarded through the Chief Minister.

According to Nasiruddin, there was an improvement in the package. "The Government had told us that HLL was willing to allow an additional one per cent commission on only seven HLL products. The present agreement is over a spectrum of 100-odd HLL products," he said.

There are brow-raising gaps in the information within the KVVES fold too. While some of the KVVES office-bearers spoke of a special financial bonanza for HLL distributors, some drew blank on the fine print of the reported Coimbatore pact. "An HLL official had indicated an additional financial incentive. The amount is yet to be decided," Nasiruddin said.

He dismissed the rumours that the traders were forced to volte face, because of their recent preoccupations with the sales tax raids, initiated by the Government.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.