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.

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