Capitalism: Air Deccan and the good old MRP

So I went to this nearby grocer one morning. Purpose, to buy milk. 1 liter of milk and guy asked for Rs 15. As always, I couldn’t find packaging date printed on Nandini milk pouches, but the MRP (Maximum Retail Price) was loud and clear, Rs 6.50. That meant the grocer was breaking the law by asking for an extra Rupee on each pouch. I pointed out and he apologized. Victory!

Next scene.

I am flying Air Deccan. “Will you like to buy some snacks”, asks an air hostess. I pick out a pack of potato chips (the one that Saif Ali Khan sells, I like Saif) and ask, “how much?”. “20 Rupees sir”. I glance at the bag of chips, letters printed on which tell me, “MRP Rs 10”.

What do I do now? Report Air Deccan to a Consumer Rights Advocate?

They still print MRP (Maximum Retail Price) on consumer goods. I learn that is the law. It was designed as a deterrent against hoarding, ‘manufactured’ shortages and retailers cheating unaware consumers. But does the MRP make sense now?

Going by my example on the ground, I mean at the grocer, you may say yes. But going by the experience in the sky, I would say no.


8 Responses

  1. the MRP has become a joke. I am surprised that the milk vendor charged (albeit after being pointed out) the MRP. In BTM where i stay all the (modern day) milkmen charge atleast 50 ps more than the MRP. This they say is “Service charge” when they drop it at your home or if you buy it at the shop, they call it “fridge charge” ; Last week when i travelled by the Intercity train, the wafers were sold at a Rs.5 premium over the MRP and most people bought it without a whimper. The seller had a “buy it or leave it” attitude and nobody (including me) questioned it. The bigger joke is with Pharma products. Taxes are charged over MRP (God alone knows how or why its called MRP ) and thats beyond my comprehension.

  2. Namma Nadu – By the way, in the new VAT regime, no one can charge you any tax on top of MRP. MRP is inclusive of VAT, tell that to your Chemist next time you visit.

  3. Actually, my experience with local grocers is that for most items they charge *below* the MRP printed on the pouch. Especially items like sunflower oil etc they usually charge a good 4-5% below MRP.

  4. Cold Drinks are routinely charged above MRP at Cinema Halls, Outside Railway Stations, and near Airports.

    Basically : Anywhere – you the customer – does not have a choice.

    And yes BTM Layout is a den of small time vendors routinely charging extra for milk pouches. Heard this before too.

    Perhaps the concept of MRP should go away, like in USA – where no such thing exists. But, not sure what the implications are in a country – where shopkeepers are known to create artificial shortages wherever possible.

  5. Dear Namma. Perhaps the human mind has designed capitalism for holding others hostage: once you have managed to take the money of another, unscrupulously and in excess, and you have managed to do that enough times; then with impunity you have earned the right – so you think – to ask anything of others you wish. This includes once in the sky with no where to go, charging whatever you wish for a bag of chips. It makes for an interesting game, capitalism. Can you get to the end of the game, and still want to do good, well?

  6. Mohan – MRP is the ‘max’. Charging ‘below’ is perfectly fine.

    Apun Ka Desh – exactly! That is why MRP is fast losing relevance.

    Phrenseed (frenzied?) – indeed, it is an interesting game. But it will be worse if Air Deccan didn’t allow any food to be carried to the plane, and then made you buy those snacks. As of now, ‘bring your own bag of chips’ works, so I am not complaining.

    BTW, for those who charge above MRP even in ‘regular’ situations, the magic wand is this. Ask for a printed, regular and itemized receipt. Worked for me a few times.

  7. ideally, what should happen is that these airlines should bulk purchase packs that have no msrp on them. (for example, we do get the krackjack multi packs – 250 gm – with five 50 gm packs that have no msrp written on them). i am not saying that similar packs should be used – at the very least, i would want the ingredients also to show on the pack.

    having said that, i am sure you have bought biscuits in silicon valley desi stores for $1 or so, when it clearly says Rs. 6 or so on the pack (not all stores get only the specially marked for export packs).

    – s.b.

  8. Thats not right. MRP is MRP is MRP. How does it make a difference whether its been served on a toilet seat or a gold plate? Please understand supply chain margin based pricing. An MRP indicates the maximum price that you as a consumer should pay after all markups. Is there a difference in the value added if the grocer sells to you or Air Deccan or the raja of gaipajama does?

    Please also understand that the final retailer gets a huge margin, anything varying between 30% to 70% depending on the good. (And by the way, next time you bargain with a shop keeper and he says that he cant reduce the price, it is a branded good, margin is very less, smash the f****r’s face in because he is outright lying to you.) The MRP is always the maximum possible assuming the highest tax rates, etc. Its a way to protect consumers from being cheated by every neighbourhood retailer who otherwise would be able to charge you anything, anything all all by their whim and fancy.

    The MRP has not become a joke. Its very much applicable everywhere. Try charging a Delhi housewife one naya paise more than MRP and see if she pays. As I have argued before, the MRP has become a joke with the newly rich of India, who fashionably believe that time is more valuable than money. Instead of fighting for their rights, and joining hands and saying that this is wrong, this is illegal, we will not buy, such people are happily letting themselves be exploited.

    Sorry for the long comment, but regular readers of my blog will realize that consumer rights are close to my heart.

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