Enraged over the non-cooperation of a section of pharmaceutical traders who have stopped supply of drugs to the centralised drug purchasers, the Chennai-based retail major Subhiksha Trading Services has started sending legal notices to pharma wholesalers in Mumbai for violation of Essential Commodities Act, Drugs Price Control Order (DPCO) and various provisions of Drugs and Cosmetics Act.
The company, which had sent legal notices to the non-cooperating wholesalers in Chennai and Pune in the second half of last year, had also started sending notices to wholesalers in Mumbai by the end of 2007. The action comes in the backdrop of Mumbai-based Pharmaceutical Wholesalers Association's (PWA) decision to stop supply to all the centralised purchasers including Subhiksha, Apollo Pharmacy, Medicine Shoppe, Big Bazaar, D-Mart and Reliance Retail. PWA is an affiliate to the Maharashtra State Chemists and Druggists Association (MSCDA).
"Refusing drugs supply to a retailer is violation of the Essential Commodities Act and we are taking legal action against wholesalers who are not ready to supply drugs to us. We have already taken action in Chennai and Pune and recently started issuing notices in Mumbai," said R Subramanian, managing director, Subhiksha. However, he added that the company has been facing the issue for more than a year and there is no shortage of drugs in Subhiksha retail shops, as it is currently able to manage the stocks.
The company's legal notice mentions that refusal to sell the pharmaceutical products to Subhiksha will be contrary to the provisions of DPCO 1995, Essential Commodities Act and also various provisions of Drugs and Cosmetics Act and rules made thereunder. The non-cooperation with retail supply chains is the decision of the traders' national association, All India Organisation of Chemists and Druggists (AIOCD), said a wholesaler on condition of anonymity.
When contacted, J S Shinde, general secretary, AIOCD and the president of MSCDA denied the allegation explaining that the association has not refused supply to the organised retailers. "Subhiksha is running shops in the state in the past several months and we heard that they are planning to set up more shops in the state soon. How can they do it if they are not getting enough supply to run business? But if the company is trying to make centralised purchases, we have objection. It is not possible to allow wholesales from a wholesaler to another wholesaler, as it involves legal issues." Further, he added that the organisation is ready to communicate with the company, if Subhiksha comes forward for discussion.
However, Subhiksha is learnt to continue with dealing the issue legally, as more wholesale distributors are receiving legal notices from the company. The wholesalers also allege that the association is threatening non-cooperation to the wholesalers who are ready to supply drugs to the organised retailers.