The new distribution model of HP continues to run into trouble. Now it has hit upon a road block in the Tamil land.

The dealers in Chennai have accused the vendor of showing favoritism and have blamed it for restrictive trade practices. The issue has arisen after the vendor roped in Best Source, a newly formed entity, as one of the two regional distributors (RDs) for Chennai market. "By bringing in a new entity, HP is effectively bypassing the existing players in the Chennai market," the dealers claim.

The two players appointed by HP for Chennai are Best Source and Pelican.

To allow the channels in the city to voice their grievances with respect to HP's new distribution policies, HP's national distributor Redington India convened two meetings attended by HP and partners this week. "Both the meetings had to be adjourned abruptly as HP representatives, led by Ganesh Selvaraj, Zonal Manager - Zone 1 & 2, PSG, HP India Sales, could not give any justifiable reply to the accusations leveled against HP by the partners who attended the meetings," informs Sai Murali, Committee Member, ITTA, a reseller association from Chennai. ITTA has more than 150 members.

The dealers accuse that HP did not give a due consideration to the local players in Chennai and abruptly brought in Best Source, which is a new, external entity. They also accuse that HP has not been impartial when it comes to allotment of territories to the newly appointed regional distributors. 

"HP's allotment of territories is fraught with partiality. Best Source has been given control of the area covering West Mamalam, T Nagar, Mount Road, Ritchie Street, all way up to OMR that contributes close to 80 per cent of Chennai's IT business. Whereas Pelican is restricted to North Chennai comprising Anna Nagar, Kilpauk, Purasawalkam, and Perambur," informs Kumar, Secretary, Sneham, another reseller association from Chennai that represents the business districts excluding Ritchie Street. Sneham (word meaning: love in Sanskrit and friendship in Tamil) has more than 250 members.

According to resellers, HP is also imposing an unacceptable restriction on the partners in Chennai. "HP has made it mandatory for resellers to buy exclusively from any one of these two players. In an open market economy, how can resellers accept such restrictions?" questions Mulchand Jain, Committee Member, ITTA. Jain is an ex-president of the association.

Sneham and ITTA have already won the moral support of Confed-ITA, the confederation of channel associations that represents 18 IT channel associations in the country.

The dealers in Chennai have decided to wait till the next Tuesday i.e. the time that HP has asked for. "We want to be open and fair. We will give HP the due time to revert. But if the vendor does not mend its ways, we may be forced to take some harsh steps," warns Kumar of Sneham.

When contacted, Ganesh Selvaraj refused to comment on the issue. An email sent to HP yielded no response. HP's PR communicated the vendor's inability to respond at a short notice.

— Nagesh M Joshi

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