---
title: "Pepsi Cola Shanghai Channel Stuffing: Goods Seized, the Mastermind Behind It Is Shocking!"
description: "Channel stuffing is a chronic problem in the FMCG industry. Due to misaligned interests between distributors and manufacturers, each party often engages in behaviors unacceptable to the other when maximizing their own interests. In the sales process, channel stuffing by distributors is like 'pressing down one gourd while another floats up'—a recurring phenomenon. Inadequate prevention and management of channel stuffing can severely harm the healthy, sustainable development of the market. Every distributor detests channel stuffing but must face the reality. Every manufacturer frequently shouts: 'Strictly investigate channel stuffing...'"
author: "New Distribution"
publisher: "New Distribution"
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published: "2017-03-17"
language: "en"
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# Pepsi Cola Shanghai Channel Stuffing: Goods Seized, the Mastermind Behind It Is Shocking!

> Channel stuffing is a chronic problem in the FMCG industry. Due to misaligned interests between distributors and manufacturers, each party often engages in behaviors unacceptable to the other when maximizing their own interests. In the sales process, channel stuffing by distributors is like 'pressing down one gourd while another floats up'—a recurring phenomenon. Inadequate prevention and management of channel stuffing can severely harm the healthy, sustainable development of the market. Every distributor detests channel stuffing but must face the reality. Every manufacturer frequently shouts: 'Strictly investigate channel stuffing...'

**Channel stuffing** can be said to be a chronic disease in the FMCG industry. Due to the misalignment of interests between distributors and manufacturers, when each party seeks to maximize its own interests, they often engage in behaviors that are unacceptable to the other. In the sales process, one often encounters the phenomenon of distributors engaging in channel stuffing, like "pressing down one gourd while another floats up," or "you sing and I take the stage." Inadequate prevention and management of channel stuffing will seriously affect the healthy and sustainable development of the market.
**As for channel stuffing, every distributor detests it, but they have to face the reality. Every manufacturer often shouts:**
**Strictly investigate channel stuffing! Severe penalties for those found, and other strong words. However, channel stuffing is talked about every year, and it happens every year!**
**Pepsi Cola Shanghai Market Channel Stuffing, Truck Seized**
Recently, through FMCG reports, we learned that "Pepsi Cola Shanghai market experienced a channel stuffing incident, and it has escalated to law enforcement." Later, when verifying with senior executives of Shanghai Pepsi-Cola Co., Ltd., the response was: This is true. The channel-stuffed Pepsi Cola came from Jinan, and a truckload of goods has been temporarily seized by relevant law enforcement departments. The price per box is 4-5% lower than the Shanghai market price.
According to Pepsi Cola's internal regulations, Pepsi Cola products in the Shanghai market should be sold and managed by Shanghai Pepsi-Cola Co., Ltd.
This Shanghai channel stuffing is not an isolated case. Pepsi Cola's channel stuffing has been quite serious at times. For example, it has happened that Sichuan Pepsi products can be bought in Heilongjiang and Hainan. It is understood that unlike Coca-Cola, which only cooperates with Swire and COFCO, Pepsi Cola's bottling plants in mainland China have diverse partners, including local powerful enterprises and state-owned enterprises with resource-related huge losses. Moreover, the cooperation terms and profit distribution between Pepsi and each partner are different.
In addition, after the establishment of the "Kang-Bai Alliance" (Kangshifu and Pepsi alliance), there have been many contradictions between Kangshifu Beverages and the Pepsi Cola bottling plants represented by the East China region. It cannot be ruled out that similar channel stuffing incidents are intentional. However, due to the low prices from channel stuffing, it has caused significant damage to Pepsi Cola's normal market order and brand image.
**Channel Stuffing Happens Every Year, Why Especially More in the Past Two Years?**
In the past two years, channel stuffing of big brand products has become more and more frequent. Some brands even have all their distributors engaging in channel stuffing, creating a mess. What's going on?
Many domestic enterprises, when setting sales tasks for distributors, tend to set them as high as possible, as if every distributor has unlimited potential! If they don't increase by more than 20%, they feel embarrassed to report to the boss! Why do I say that channel stuffing has become serious in the past two years? The reason is: the habit of setting sales tasks, with increases every year for so many years! Coupled with the economic slowdown in the past two years, sales growth has not been as fast as expected! If distributors don't engage in channel stuffing, they can't complete their tasks. Regional managers force them to complete it anyway. No one has any other choice, especially for domestic brands that don't intensively cultivate the market and just put pressure on distributors. If they don't stuff channels, what can they do? In the end, it becomes a situation where you stuff my area and I stuff yours, and no one can blame anyone!
**Why Do Famous Brands Like Pepsi Cola Engage in Channel Stuffing?**
Looking at the channel stuffing behaviors in the past two years, most occur among big brands. Unfamiliar brands generally don't stuff channels because they don't sell much, and manufacturers find it hard to even find a distributor. Of course, manufacturers don't have many tasks, and distributors usually mark up prices high, so there's no profit, and no one plays along!
But once a brand has a certain level of fame, the manufacturer becomes arrogant. They provide personnel, expenses, etc., but the distributor must complete sales tasks. Distributors who can easily complete their tasks every year generally don't stuff channels.
What if a distributor can't complete the task? Basically, they will stuff channels at a flat price or with a slight profit margin to complete the manufacturer's task, earn the money they deserve, and that's it.
What if most distributors can complete their tasks, but a few can't, causing the regional manager to fail the overall task? They privately apply for expenses from the manufacturer for distributors with good relationships, letting them stuff channels into weak markets. This situation is more serious because the distributor is helping out! Without profit from channel stuffing, they won't do it, especially since next year's task will definitely be raised! Most of the time, manufacturer managers coax and promise: "Next year's task won't be increased; we brothers have to help each other!" This kind of channel stuffing price is relatively low, even lower than the factory price.
**Who Is the Real Culprit Behind Channel Stuffing?**
All channel stuffing is blamed on distributors by manufacturers! But we can't simply put all the blame on distributors. Think about it: if distributors could smoothly complete the manufacturer's tasks, smoothly earn profits, and smoothly reimburse expenses, which distributor would go stuff channels? Channel stuffing means giving up profits! Channel stuffing means raising next year's sales tasks! Channel stuffing means offending industry friends! Channel stuffing means you are on the way to giving up that brand! Without profit, no distributor will play with any brand! Industry vicious circle: Why do some distributors always stuff channels? Because they completed their tasks through channel stuffing last year. If they don't stuff this year, how can they complete the task? How can they survive?
So, the manufacturer's shadow is everywhere. Distributors are not the culprits who create channel stuffing! Manufacturers and their sales teams also bear responsibility.
**How to Prevent Channel Stuffing?**
The healthy growth of a market, in addition to team building and network channel development, also requires channel stuffing management. For this, we might learn from Wahaha's channel stuffing management system. To ensure the interests of distributors and maintain the stability of the regional price system, all links must strictly implement the company's regulations. The most effective way is to severely crack down on cross-regional sales. To quickly investigate and deal with channel stuffing, Wahaha Company has done the following meticulous work:
**1. Set Up an Anti-Channel-Stuffing Supervision Department**
The group company has a supervision department dedicated to checking channel stuffing and other behaviors detrimental to market sales work; provinces also have internal supervisors who can quickly verify and deal with cross-regional sales behaviors. For example, the Yubei Market Supervision Group was established relatively early and once became a model for Wahaha Company.
**2. Product Identity Information Management**
Every product produced by Wahaha Company is marked with the production date, time period, shift, and serial number at the time of production. According to planned orders, when shipping to various regions and customers, each product package is marked with the corresponding customer's serial number. At the time of leaving the factory, staff input the product identity information into the Wahaha sales management system, just like everyone's ID card. Enter the system and you know who it is. In addition, when first-level wholesalers deliver to second-level wholesalers or distributors in their area, they must also print hidden codes and marks on the product in relevant positions according to company requirements, both to protect themselves and to prevent second-level wholesalers from selling across regions.
**3. Accept Reports and Quickly Verify**
Whether it's sales personnel, first-level wholesalers, or second-level wholesalers, as long as they find suspicious goods in their area, they only need to fill in the report form with the serial number or production date on the product packaging, and promptly report it to the head office supervisor or the provincial supervisor. The supervisor will lock onto the source of the goods based on the product system information, quickly go to the suspicious source to collect evidence and verify, and simultaneously notify the relevant business supervisor in charge of the source to come and confirm. The basic process is: discovery → report → verification and report → handling.
**Besides Pepsi Cola, which other big brands have channel stuffing behaviors? What do you think about channel stuffing and Wahaha's channel stuffing management system? Welcome to leave a message at the bottom to share information and express your opinions!**
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