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Tweak the law on packaged goods to stop differential pricing

Sale of bottled water at highly inflated prices in airports, multiplexes and even malls, has been a contentious issue for a long time now, with several consumers questioning such practices

analysis Updated: Dec 02, 2016 18:59 IST
Differential Pricing

Sale of bottled water at highly inflated prices in airports, multiplexes and even malls, has been a contentious issue for a long time now, with several consumers questioning such practices(REUTERS)

In a bid to crack down on exorbitant pricing of packaged water and other beverages sold at airports, multiplexes and malls, the Union ministry of consumer affairs has written to all the state governments, asking them to ensure that there is no dual pricing of these commodities.

Clarifying that there is no provision for dual pricing of packed goods, including water and beverages under the Legal Metrology (packaged commodities) Rules, the ministry also quoted a recent order of the apex consumer court, which warned against such differential pricing and urged the department of legal metrology to take action against those who indulge in such practices.

Sale of bottled water at highly inflated prices in airports, multiplexes and even malls, has been a contentious issue for a long time now, with several consumers questioning such practices.

Read: Consumer panel directs cinemas to provide free drinking water

Rule 6 of the Packaged Commodities Rules, 2011, formulated under the Legal Metrology Act, 2009, mandates display of retail price on all pre-packed goods meant for sale, distribution and delivery and this includes bottled water. Rule 18 (2) prohibits their sale at a price higher than the printed price. Rule 18 (6) also says that the manufacturer or packer or the importer shall not alter the price on the wrapper once printed and used for packing.

So in order to circumvent the law, manufacturers started marking a higher MRP on water and other beverages meant for sale at airports and multiplexes. In Big Cinemas and Reliance Media-Works limited Vs Manoj Kumar (RP NO 2038 of 2015) the complaint centered around one such dual pricing of water.

Read: By law, restaurants can charge you more than MRP

The complainant here said that a bottle of Aquafina was being sold at ₹30 at the cinema hall while its price outside was ₹16. The District Consumer Disputes Redressal Forum, before which the case was first filed, directed the opposite parties to refund ₹14 to the consumer and pay a compensation of ₹5,000, besides costs of ₹1,500. The Big Cinemas and another then filed an appeal before the State Consumer Disputes Redressal Commission and later, before the National Consumer Disputes Redressal Commission.

The apex consumer court, after deliberating on the issue, upheld the views of the lower consumer courts and in its order of February 1 directed the opposite parties to pay in addition, costs of ₹5 lakh, to be credited to the Consumer Legal Aid account of the Commission.

While doing so, it warned against differential pricing of the same product at different outlets. “There cannot be two MRPs, except in accordance with the law”, the Commission held. It also asked the director, legal metrology, to “wake up, make an enquiry and take action against the wrong doers”.

Following this order, the department has been sending advisories to various legal metrology departments in states and union territories to take note and ensure that manufacturers do not print an inflated MRP on water and other beverages sold at airports, multiplexes and malls.

It has also been asking state governments to rigorously follow up on consumer complaints on this score and take suitable action.

However, in order to put stop to such exploitation of consumers at airports, multiplexes and malls, the union ministry of consumer affairs has to do much more: It has to ask all state governments/Union Territories to put up notices clarifying its position at prominent places at airports , multiplexes and malls and provide a cell phone number on which consumers can complain, for quick enforcement action. It should also tweak the law pertaining to packaged goods, thereby clearly prohibiting such dual pricing, so that when this issue comes up before the Supreme Court (I am sure it will) there will be no ambiguity and absolute clarity in the matter.

Pushpa Girimaji is an author, journalist and a consumer rights columnist

The views expressed are personal

@PushpaGirimaji