Do MRPs really benefit consumers?
K. PARTHASARATHI
DURING DEEPAVALI when I bought firecrackers I was shocked to find the steep maximum recommended prices marked at 200 per cent and more over the prices at which they were actually sold. The shopkeepers sold them at a fraction of the prices marked on the packets giving a sense of false satisfaction to the buyers who were really fleeced.
The MRP does not serve as a benchmark at all for a fair price when there is little correlation between the cost to the manufacturer and the price at which they are finally sold to the consumer passing through several hands in between. This is not only true of seasonal items such as crackers but also of electronic goods, stationery, electrical and other products of daily use.
The sad part of the whole scheme is that most of the day-to-day purchases we make such as medicines, cosmetic goods, stationery, and grocery items are all sold at MRP with no reduction whatsoever. With no discounts, the customers have no clue how much mark up has been done. In every purchase we make, we pay a very high price to take care of a disproportionately high margin retained by the wholesalers and retailers.
A uniform printed price common for all places irrespective of the varying transportation costs to differing distances is also irrational. Nevertheless the common folk get a general sense of satisfaction that they have not paid more than what has been printed on the product and that they have not been cheated by the retailer.
Purpose defeated
The good intention of the Standards of Weights and Measures (Packaged Commodities) Rules, that enjoins on the manufacturers to specify on all pre-packed goods meant for retail sale the maximum retail price inclusive of all taxes, has not conferred any benefit. Though the indication of MRP on the goods is meant to ensure that consumers are not cheated by retailers, the scheme has been corrupted by jacking up the MRP to unreasonable levels leaving in the hands of retailers a large margin.
The MRP is never intended to serve as the final selling price but only as an upper limit selling beyond which is punishable under law. Some traders offer heavy discounts on MRP on festive occasions or to lure new customers or retain large buyers indicating the flexibility they have as the margin spread is sufficiently wide.
The question arises why have an MRP scheme when there is no scope for the consumer to monitor it with reference to the cost. Action can be taken only when the goods are sold higher than the MRP. When the MRP itself gives an unconscionable profit to every one involved in the trade, why would anyone sell at a higher price than the MRP?
The consumer groups have not been able to get this matter resolved despite their long battle. Their demand to the government to order the producers to indicate the wholesale price (first point price) besides the MRP on the product has not met with success. Even this is not adequate.
Either the government should devise ways to deter the producers from fixing the MRP arbitrarily or dispense with the mandatory practice of printing MRP prices which in any case do not help the consumers. The government need not be a party to the charade of fleecing consumers going under the name of MRP.
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