Correct option is C
The correct indirect form of the given sentence is (c) He says that some goods are of poor quality.
Direct speech- Direct speech, also known as quoted speech or direct quotation, is a way of reporting someone's exact words.
Indirect speech- Indirect speech, also known as reported speech or indirect quotation, is a way of reporting someone's words or thoughts indirectly, without using their exact words.
The direct speech is in present tense, so the reported speech remains in present tense.