2022-06-12 13:53:03
But when it comes to the MRP, the consumer is central. And the simplest argument made in its favour is that it serves as a reference point for customers to compare the discounts they are getting across stores or online. “Without the MRP, retailers will jack up prices and fool customers by claiming to offer bigger discounts than they are,” says the former FMCG executive quoted earlier.
And sure, you could argue that in the absence of the MRP, a retailer can raise the ‘suggested price’ of a deodorant from Rs 250 (US$3.2) to Rs 350 ($4.5) during a sale and offer a discount of 25%. As a result of which the final price of ~Rs 263 (US$3.4) is more than the suggested price.
But unless you are buying something that is only available at a specific store, like the sports-goods store Decathlon, you always have the option of checking how much the product in question is being sold for elsewhere.
Incidentally, in 2017, Decathlon and other single-brand retailers such as Ikea were exempted by the government from printing the MRP on their labels. These companies had lobbied for this saying that an MRP makes sense when there are many intermediaries between the manufacturer and retailer, as is the case with FMCG products and electronics.
But when the manufacturer and the retailer are the same, like Ikea, there is little use for having the MRP on each product. That doesn’t mean there is no MRP; it’s on the product shelf, as can be seen in photos here from The News Minute:
And it isn’t like MRPs are always sacrosanct either. We are absolutely fine paying more than the MRP for a bottle of Pepsi at a café or an upscale bar because we believe we are getting more than just the bottle. Maybe it’s the air-conditioned space or the seaside view we have as we load up on sugar.
So, why is it hard for us to think of grocery delivery from the neighbourhood store as a similar luxury that we ought to pay for? Or, if there is only one store in a radius of 5 km, why should the owner not take advantage of that by charging more than other retailers? After all, they set up shop when no one else did.
Having said that, suggestions to do away with the MRP tend to invite immediate backlash over attempts to water down consumer protection. And that’s a headache any government would prefer to do without.
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