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Similar commodities different prices Find out why

Similar commodities, different prices: Find out why

We have all noticed that the price of identical commodities vastly differs depending on the place where it is being sold. The question now arises, can companies sell identical pre-packaged properties at different prices? The simple and uncomplicated answer is no.

As per the amendments introduced to Legal Metrology (Packaged Commodities) Rules 2011, and effective from January 1, 2018, it is mandatory that dual MRPs cannot apply to identical pre-packaged commodities. However, using a strategy, companies price the same commodity differently and sell separate packs across different retail outlets thus bringing variations in cost.

Debashish Mukherjee, Partner (Head-Consumer and Retail industries), AT Kearney stated that packaged food companies may have different stock-keeping units (SKUs) for different channels and though they are not allowed to charge different MRPs for the same SKU, they can charge different MRPs for different sizes or SKUs. This year, in early 2018, the Supreme Court has ruled that hotels and restaurants can infact sell bottled water as well as other packaged products at prices above MRP. This is because they are rendering a service which can’t be governed under the Legal Metrology Act.

For retailers at high cost real estate locations, it is a big challenge to price their packaged commodities considering the rent as well as the multiple changes that GST has brought with it. It has become a difficult position thus attracting much chaos.

There are a number of rules and regulations under Legal Metrology, and if you are a manufacturer, exporter or a retailer, it is best to hire a legal metrology consultant for professional advice and expertise. For more information on this, you can get in touch with our experts info@legalmetrology.in.

 

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