Dual/ Differential Maximum Retail Sale Price

Consumers, in India, have in the recent past had a concern in relation to FMCG and, in particular, food products being made available by manufacturers, at different prices in different places. The complaints have been with regard to products being sold at cinema halls, malls, airports etc., at higher prices as compared to the same products at regular retail shops. The Department of Legal Metrology has, in the recent past, pulled up such sellers but was unable to bring these matters to logical closure as the Legal Metrology Act, 2009 and the Legal Metrology (Packaged Commodities) Rules, 2011 (PC Rules) did not provide for the regulation of dual/ differential pricing.

The Ministry of Consumer Affairs, through a recent amendment to the PC Rules, introduced a provision regulating the dual/ differential pricing of products. This provision prohibits manufacturers, packers or importers from declaring different prices on identical commodities. The prohibition is, however, subject to the pricing being arrived at by adopting restrictive or unfair trade practices as have been set out in the Consumer Protection Act, 1986.

The above would mean that a manufacturer, packer or importer is prohibited from using a dual/ differential maximum retail sale price in relation to an identical commodity, by using restrictive or unfair trade practices as per the Consumer Protection Act. As a consequence, it would appear that a manufacturer, packer or importer may continue to have differential prices in relation to an identical commodity as long as there is an adequate justification for the same, which results in an increased cost from the factory to the shelf, provided the same is not coloured by unfair or restrictive trade practices.

The amendment is being brought into force from January 1, 2018 and manufacturers would, from such then on, have to ensure that all their products are in compliance with this provision.

Smart Consumer App – FSSAI

The Food Safety and Standards Authority of India (FSSAI) is attempting to ensure that consumers receive the maximum information in relation to the products that they intend to purchase. In this regard, the FSSAI is establishing a network integration with the ‘Smart Consumer App’, which would provide consumers with the desired information.

The ‘Smart Consumer App’ has been developed by the Ministry of Consumer Affairs in the year 2016 along with GS1 India (a body that has been set up to issue barcodes), and the function of the app involves a consumer scanning the bar code set out on any package or entering the Global Trade Index Number (GTIN), and receiving information in relation to the product. The information could relate to the statutory declarations required to be set out on a package or information in relation to a package of food being recalled by the manufacturers etc. The detailed intention of the FSSAI has been set out in a press release issued by the FSSAI on September 12, 2017.

The FSSAI is encouraging manufacturers, suppliers and such persons to start providing the required information to GS1 India so as to integrate the barcode and the GTIN with the information, for the consumer information and use.

Conflict – Minimum Height of Letters and Numerals

A packaged product is required to convey certain consumer relevant information through its label. The lettering used to set out such information has been subject to regulation by the Department of Legal Metrology, and in case of food products, the FSSAI as well. These regulations presently prescribe a minimum size of the letters and numerals based on either the net quantity of the product, or the area of the principal display panel.

The Legal Metrology (Packaged Commodities) Rules, 2011 (PC Rules), as mentioned in an earlier post, has now been amended in relation to the minimum height of such letters and numerals. The recent amendments to the PC Rules, which come into effect from January 1, 2018, require that the minimum height of the letters and numerals are to be determined solely on the area of the principal display panel. The manner in which the area of the principal display panel is required to be calculated is also set out in the PC Rules.

The above amendment poses a challenge, specifically in relation to food products, where the minimum height of the letters, under the FSSA, in relation to all the declarations are required to be maintained at 1 millimetre, regardless of the size of the package of the product, whereas the minimum height of the letters in relation to the declarations under the PC Rules would change depending on the area of the principal display panel. This would mean that the declarations being set out on a package would be of different sizes thereby compromising on the aesthetics of the same.

In addition to the above, the PC Rules previously had provided an exemption whereby in the event that any other law governed the minimum of height of the letters and numerals of a declaration, the said law would be applicable as against the PC Rules. This exemption has been retained, however, with a qualification, whereby certain declarations have to mandatorily comply with the PC Rules, notwithstanding the fact that the minimum height of the letters and numerals of the same are also governed by another law.

An example of the above would be the ‘net quantity’ declaration which is a mandatory declaration, both under the FSSA and the PC Rules, and the minimum height of the letters and numerals of the same are governed by both the laws. The question that would therefore arise is in relation to which law is required to be complied with, i.e., whether the requirements under the FSSA or under the PC Rules. Whilst the key to this may be looked for in the principles of statutory interpretation, it appears that this conflict has been overlooked while amending the exemption provision set out in the PC Rules.

In conclusion, it appears that the only possible way in which both the FSSA and the PC Rules can be complied with is if the law requiring greater compliance is followed. However, it may also be argued that as there is a specific law governing food products, and that PC Rules recognises the same, and permits certain other declarations, such as the name of the product, to only be governed by the FSSA, the PC Rules must ideally continue to recognise the same in relation to all the declarations and permit conflicting provisions in relation to food products to be governed only by the FSSA.