Single brand retailers may not need to quote MRP
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Updated: Oct 07, 2017, 10.32 AM IST
NEW DELHI: The government is likely to change labelling norms to exempt single brand retailers from marking maximum retail price (MRP) on their products.
The European Business Group (EBG), which comprises representatives from companies including Ikea, Hennes & Mauritz AB (H&M) and Decathlon, has been in talks with the government to amend the current rule that makes it mandatory for a manufacturer or a marketer to write the MRP , date of manufacture and other details on all packaged items sold in Indian market.
However, top European retailers had said the practice increases production cost -in Ikea's case, labelling costs per store could be as high as Rs 7-10 crore.
"MRP makes sense when you have middlemen in between the producer and consumer to protect consumer rights. But when you are single brand retailer, there are no middlemen," Ikea India CEO Juvencio Maeztu told TOI. "If you don't do extra labelling to put on stickers, you are reducing cost. If you are reducing cost, then you are reducing price for consumers. The regulation has to change," he said.
"It will help reduce manufacturing costs at various stages," said a spokesperson for French sporting goods retailer Decathlon.
Sources said government is set to clear the proposal soon. "In the legal metrology rules, all items are covered under one norm -there is no specific criteria of single brand retail, which the commerce ministry has notified.We cannot give exemption to only one company and therefore we have to change rules," said a consumer affairs ministry official.
Once the consumer affairs ministry clears the policy, the matter will be referred to the law ministry . Sources said even industry bodies have argued that multi-brand retailers should also get similar benefit.
"India is among the few countries in the world that has the MRP rule in place to protect consumers," said Rajat Wahi, partner (management consulting) at Deloitte India.
The European Business Group (EBG), which comprises representatives from companies including Ikea, Hennes & Mauritz AB (H&M) and Decathlon, has been in talks with the government to amend the current rule that makes it mandatory for a manufacturer or a marketer to write the MRP , date of manufacture and other details on all packaged items sold in Indian market.
However, top European retailers had said the practice increases production cost -in Ikea's case, labelling costs per store could be as high as Rs 7-10 crore.
"MRP makes sense when you have middlemen in between the producer and consumer to protect consumer rights. But when you are single brand retailer, there are no middlemen," Ikea India CEO Juvencio Maeztu told TOI. "If you don't do extra labelling to put on stickers, you are reducing cost. If you are reducing cost, then you are reducing price for consumers. The regulation has to change," he said.
"It will help reduce manufacturing costs at various stages," said a spokesperson for French sporting goods retailer Decathlon.
Sources said government is set to clear the proposal soon. "In the legal metrology rules, all items are covered under one norm -there is no specific criteria of single brand retail, which the commerce ministry has notified.We cannot give exemption to only one company and therefore we have to change rules," said a consumer affairs ministry official.
Once the consumer affairs ministry clears the policy, the matter will be referred to the law ministry . Sources said even industry bodies have argued that multi-brand retailers should also get similar benefit.
"India is among the few countries in the world that has the MRP rule in place to protect consumers," said Rajat Wahi, partner (management consulting) at Deloitte India.
(This article was originally published in The Times of India)
