Price Fudging in Packed Goods - Less Weight Same Price
Price Fudging in Packed Goods - Less Weight Same Price
It has been observed that the multi – national, FMCGCs and major Indian companies engaged in the manufacture of certain common daily useof consumables like, biscuits, tea, noodles, butter, soaps, detergents, washing powder etc., have while prima facie , maintaining the retail maximum price ( RMP), reduced the weight of their packages by 5 to 25 grams and in some cases more in thelast one year or so and the poorconsumer, not so vigilant to noticesuch maneuverability,whoisalready reeling under pressure of risingprices,is paying effectively higher pricefor the same weight, which is also not reflected in the WPIand Inflation. The sad part is that the concerned manufacturing companies, taking technical advantage of the relative Rules, are claiming that nothing unlawful has been resorted to by them and their action is with in the law.
The concerned companies/their federations/associations have in support of their above action reportedly taken shelter under Rule 5 of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, as substituted by theNotification No 425(E) Dt. 17.7.06 issued by the Government of India, Ministry of Consumer Affairs, Food and Public Distribution (Department of Consumer Affairs). For a ready reference, the above notified Rule 5 is reproduced below:
……….4. For rule 5 of the said rules, the following rule shall be substituted, namely:-
'5. Specific commodities to be packed and sold in recommended standard packages: The commodities specified in the Third Schedule shall be packed for sale, distribution or delivery in such standard quantities as are specified in that Schedule:
Provided that if a commodity specified in the Third Schedule is packed in a size other than that prescribed in that Schedule, a declaration that 'Not a standard pack size under the Standards of Weights and Measures (Packaged Commodities) Rules, 1977' or 'non standard size under the Standards of Weights and Measures (Packaged Commodities) Rules, 1977' shall be made prominently on the label of such package.'
Withthe above notificationof the amended Rule 5 ibid and theprovision addedthere to, the packaging ofitems instandard weights of25,50,100,125,150,175,200gms or soas per standard weightfor the commodities specified in the Third Schedule ofthe Rules ibid waspractically dispensed with and the poor consumerleft at the mercyand the clever marketingtechniquesof not alteringRMP butreducing the Weight with declarationas per proviso ibid. Astoninishingly, it wassafely presumed by theGOI that the poor consumers, whoare mostly illiterate but very much price conscious would read in betweenthelines the declaration that too mostly inEnglish, on the wrapper of the packaged item as per provision and draw own conclusion. Also, in most of the cases, the above declaration as per provision ibid is not made prominently on the label of such package. And, the poor consumer is paying indirectly the higher price to the extent the weight reduced.
Prior to the above notification, the manufacturers were required to indicate standard quantity of weight for the commodities specified in the Third Schedule, packed for sale, distribution or delivery in such standard quantities as are specified in that Schedule, which is, with the above notification, left to the discretion of the manufacturers by giving declaration as per above Proviso for the reasons best known to the Govt. and the consumers left at the mercy of the manufacturers. The mandatory concept of the packaging of particular standard weights under Rule 5 for each and every pre-packed commodity as per Third Schedule ibid was basically to protect the gullible consumers from deceptive packaging and consequent exploitation and fleecing of consumers. The main culprit would appear to be the above Notification and the manufacturers, takingundue technical advantage there of,started to pack with non standard weight and reduce weight without reducing priceand the consumer became a sufferer with no legal remedy in hands.
The standard packaging of particular weights say, 50 gms or 100 gms or 150 gms or 200 gms etc. enabled the consumers to compare the prices of the same commodity produced by different manufacturers. In the changed context, the price comparison becomes extremely difficult for common consumers.Thus, the consumers' right to choose becomes meaningless and the consumer is prevented from making an informed choice in the market place.
The Federation of Indian Chambers of Commerce and Industry(FICCI), to a reported move by the Monopolies & Trade Practices Commission investigating, if manufacturers were trying to pass on risinginput costs to consumers by reducing weights of packaged products, while keepingtheir prices unchanged, has, as per earlier press reports,contended that the reduced weights are per force indicated on the packeditemsto comply with the recent changes in the Packaged Commodities Rules, which require inter alia to indicate net weight soas to factor in any weight loss due to weather changes. The Federation's contention is not relevant and correct andis rather misleading in as much as the Notification on Rule 5 ibid was issued much earlier in July 2006 and the manufacturers started since then packaging with non standard weights and /or reducing weight without changing the price and the relative amendmentto the Packaged Commodity Rules making it mandatory to declare net weight on packaged commodities and making'grammage adjustment' to address the issue of weight variation due to environmental and other conditions and omission of the Fourth Schedule of the said Act through the GSR No 425E dated May 17, 2007became operative from May 1, 2008 only.
It is suggested that to watch the interests of the consumers and to make the price comparison easy for packaged items of same commoditybut of different manufactures with the standard weight and the RMP, the Rule 5 ibid is restored to the original position of pre notification no. No 425(E) Dt. 17.7.06 ibid and the Provision theretointroduced with the above notification withdrawn, at least for the packed consumer items to be sold in retail in India. This will ensure standard weights as may be prescribed in terms of Rule 5 ibid and Third Schedule of the Rulesibidand any increase in the input costs would then be reflected transparently in the RMP and then taken care in WPI for arriving at changes ininflation rate.
Unless we make the above issue a mass consumer protection movement and involveNGOs, Consumers' organisations, press, media, T.V., i doubt if GOI will easily restore Rule5 as it existed prior to above notificationNo 425(E) Dt. 17.7.06. Even PIL can be filedby some Conumers' Forum. We can also consider to seek information from GOI under RTI inregard to circumstances under whichit was considered appropriate to issue that notification. I feel JharKhand Group can play a major role in this regard.
Thanks and regards
G K Agrawal
Tel nos: (Res) 0 22 67 100 493
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