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Unit price on packages to help consumers make better choice

Jan 09, 2022 05:22 PM IST

In a major policy shift pertaining to pre-packed goods, the government has done away with mandatory standard pack sizes that governed the sale of these goods for over 44 years and introduced instead, unit pricing

In a major policy shift pertaining to pre-packed goods, the government has done away with mandatory standard pack sizes that governed the sale of these goods for over 44 years and introduced instead, unit pricing. The change, which will come into force from April 1 this year, will enhance price transparency and help consumers make an informed choice while buying packed goods.

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Let me explain the significance of this to consumers with a simple example. Brand A is selling 400 gms of pre-packed ghee at 240 and brand B is selling 250 gms at 175. Both brands are good and you want to buy the one that is cheaper, but how do you compare the price? The unit sale price or the price of ghee per unit of measure, printed on the package, will help you here. While the unit sale price of brand A would be 60 paise per gram (which is 600 per kg) , that of B would be 70 paise per gram( or 700 per kg) . So obviously, the difference in price is significant and brand A is cheaper by 100 a kg.

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Similarly, suppose you see on the shop shelf two brands of liquid detergents – Brand A has a maximum retail price (MRP) of 700 and the pack contains 2.5 litres of detergent. Brand B is priced at 500 and contains 1.5 litres . Which brand is less expensive? Here again, the answer lies in the unit sale price - while the Unit Price of brand A is 280 per litre, that of brand B is 333 per litre! It is for this reason that unit pricing is known as ‘comparative pricing’ that helps consumers save money.

So how did we compare prices all these years without the unit sale price? That’s where the restrictions on pack sizes came into the picture. In order to help consumers compare prices between different brands of pre-packed goods, the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 mandated that certain essential commodities like edible oil, tea, coffee, wheat flour, biscuits, water, soaps, cement and paints, be sold only in specific recommended pack sizes or weights. For example, pulses had to be sold only in packages of 100 gms, 200 gms, 500 gms, 1 kg, 2 kg, 5 kg and multiples of 5 kg. Since the weights of the packages were uniform across brands, price comparison was easy.

The Legal Metrology (Packaged Commodities) Rules , 2011 that replaced the 1977 Rules also made similar stipulations under Rule 5. However, such restrictions on pack sizes were limited to only those commodities mentioned in Schedule II of the Rules and not all packed goods. Besides, standard pack sizes did not facilitate price comparison between varying weights of different brands or different pack sizes within the same brand.

Meanwhile the increasing realization of the importance of unit pricing as an important measure of consumer protection encouraged many countries around the world to introduce in the last decade or so, unit pricing either through regulatory requirements or voluntary codes and the international Organization for Standardization even published a best practices guide for unit pricing (ISO 21041:2018) . By amending the Packaged Commodities Rules on November 2, India too has introduced from April 1, mandatory unit pricing for pre-packed goods.

With this change, Indian manufacturers, who were always unhappy with pack size restrictions , have the liberty to pack their products in any size they wish. However, in addition to the declaration of the weight or volume of the product in the package and the MRP, they also have to specify the unit sale price, expressed per gram of the product where the goods weigh less than a kilogram and per kilogram where the net quantity is one kg or more. It would be similar in case of volume, expressed in ml or litre.

For unit pricing to really serve its purpose, the union ministry of consumer affairs, which has brought about the change, should also ensure that manufacturers display the unit price in a prominent, legible manner on the principal display panel as mandated. In fact it is absolutely essential that the unit price be displayed just below or adjacent to the MRP . It is equally important to educate consumers on the significance of unit price and the difference between MRP and the unit sale price, so that come April 1, consumers are ready for it.

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