• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Richa Mishra
P.T. Jyothi Datta

Industry representatives point out that the Government's initiative stands on the premise that retailers and manufacturers "cheat" their consumers.

NEW DELHI, March 17

DOES information on the price of a product necessarily place power in the hands of a consumer?

An idea bounced by the Union Government off the industry - to find out whether wholesale price needs to be printed on packages in addition to a retail sale price - was met with a lukewarm response from the industry.

"The proposal to display First Point Price (FPP) in addition to the maximum retail price (MRP) is a retrograde step and impractical in a competitive free market," point out industry representatives following a meeting with the Department of Consumer Affairs, last month.

The intention of the Government was to give the consumer information on whether the MRP was inflated, "because in many cases the actual retail price is less than the MRP." But industry representatives point out that the Government's initiative stands on the premise that retailers and manufacturers "cheat" their consumers.

"This is misplaced, for market forces determine actual prices and not the printed MRP. If a particular retailer sells well below the MRP, it is only because he can afford to meet his costs and make his profits at his selling price. Printing high MRPs, in fact, would make their products less competitive," they said.

Further, they point out that dual price marking will only confuse the consumer. "The difference between the FPP and MRP of a commodity is not the profit margin but consumers will misunderstand the same as the profit margin. The proposed additional information, rather than enhancing the bargaining power of a consumer, will lead to bickering and irritation culminating in violent behaviour between traders and consumers."

For a host of FMCG players, who are going in for small convenient packs to meet the consumer's purse - the dual-pricing exercise may `crowd and confuse'.

"Most packaged items are of very small size, with very little space available for the declarations presently required. It is extremely difficult to print any more information or figures and even if they were to be printed, they would barely be readable," industry points out.

Also, the manufacturer would be required to print separate prices for each municipal area depending on the prevailing levy/tax, Federation of Indian Chamber of Commerce Industry (FICCI) officials said and added that the proposal to indicate FPP on any item be dropped to prevent confusing the consumer, besides taking the problems of the industry into consideration.

Article E-Mail :: Comment :: Syndication

Stories in this Section
Kellogg's exits biscuits business

Copyright © 2003, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line