The All India Organisation of Chemists and Druggists (AIOCD) has withdrawn the four-week old countrywide boycott of products of various divisions of GlaxoSmithKline Pharmaceuticals Ltd (GSK) and Novartis India Ltd.

The boycott was withdrawn on June 22, following the meeting of top-level executives of both the companies and AIOCD representative in Mumbai, last week. The boycott was started since 28th May, allegedly for violating a few trade agreements between the companies and the trade body.

Trade sources said the companies agreed to most of the demands of the traders. One of the main demands was to increase the trade margins for products like vitamins, for which the companies were giving margins less than the mutually agreed 8 per cent, at around only 7 per cent. The companies agreed to immediately increase the margin by 0.5 per cent, and to 8 per cent by 1st of January 2007.

In the case of third party manufactured products marketed by these companies, they agreed to absorb the suffered CST. In some areas of the country like Pondicherry, Himachal Pradesh, Goa etc., the companies are not operating directly at present, and the dealers in these areas have to shelve 4 per cent extra. The companies agreed to absorb the suffered CST and to start direct operations in the regions.

Another area of difference between the companies and the traders was on the issue of traders suffering because of the transition period to new VAT regime with tax of only 4 per cent. The companies agreed to check the stock and sale balance sheet, and reimburse the suffered amount of the traders during the transition period.

Sources said the companies also have agreed to the trade body to resume supplies to the traders who did not participate in the recent all India bandh of the traders and the boycott, only after getting concurrence from the AIOCD national executive and the concerned state level trade association.