Five NLSIU Bangalore students with their legal aid clinic have won their consumer forum action against Pepsi Co for charging differential minimum retail prices (MRPs) on beverages, with the forum finding that the practices were “unfair” and “illegal”.
The consumer forum, vide an order dated 1 April 2011 that was released last week, ruled:
“These printing different rent MRPs for the same material without any change in the material either in the contents or in the quantity is nothing but an unfair trade practice and selling it to the consumers is really unfair trade practice and also deficiency in service. This has to be curtailed.”
“How can the same material have a different M.R.P. at different places? There is no answer. If the retailer wants to sell it for a higher price, it is his business and he has to satisfy the customers that he is selling it at a particular price in case customers wants to take it they may take, if they may not take or they may reject it, but the manufacturer cannot print different prices for the same commodity, it is nothing but an unfair trade practice.
“As the prints different M.R.P. will allow the retailer to gain more profit for the same material which is impermissible in law. The complainants are the customers. The material purchased at a particular place has a particular M.R.P. the same material must have the same M.RP. at different places also. It cannot have two different M.R.Ps. Hence, printing different M.R.Ps is bad in law, is unfair trade practice.”
NLSIU student and complainant Adithya Banavar, who along with four others filed the complaint last year in October told Legally India: “The Forum has directed Pepsi to stop marking differential MRPs on same quantities of products. We were also awarded 5000 in damages and 2000 in costs.”
However, Pepsi Co was expected to appeal before the state commission, according to Banavar.
Advocate B S Ravikiran had appeared for Pepsi Co while the other opposite parties - the mall and the retailer - both abstained themselves from the proceeding.
The forum absolved the mall’s liability on the basis that its role was confined to leasing out and collecting rent without partaking conduct of business in selling of food or drinks and had no say in fixing or charging the impugned taxes.
The students were assisted by NLSIU’s legal services clinic in first getting the complaint admitted before the consumer district forum of Bangalore in February of this year.
Pepsi Co was unavailable for comment at the time of going to press.
Photo by mike9alive
Comments
It's not all corporate out there.
Also, the judgement seems to suggest that it is okay to charge at a rate higher than MRP ("If the retailer wants to sell it for a higher price, it is his business and he has to satisfy the customers that he is selling it at a particular price in case customers wants to take it they may take, if they may not take or they may reject it"). Surely this isn't something a CONSUMER FORUM ought to be saying?
The NLSIU legal aid clinic seems to have created a bigger problem than the solution envisaged. I applaud their activism though, but activism can not be devoid of sensibility
As for the second point about whether retailers will continue to stock it. Umm .. If the price of Pepsi or Coke goes up by 2 Rps, all sales of Pepsi and Coke through retailers will stop? What's the link.
Finally, the Consumer court was not questioning the ability of the manufacturer to determine the price of the product he sells. All it's saying, and this would be unfair trading if it happened, is that such differential pricing without any reasonable basis is not allowed. It followed a deferential approach to the business decision of the company, but provided a regulatory framework within which that decision must be taken.
And let's assume 3 and 4 have jobs, one of those nice, cushy well paying jobs that you probably went to law school to get (assuming you are one of those 5 kids). Does that change the merit of their questions? I'd genuinely hope not
Adding to those questions, doesn't the ability to label the "same product" (this is in quotes because there are service and cost differences in the product) with different MRP's actually keep the price down in the outside market (as opposed to movie halls and the like)? There's this concept of price discrimination, and second or third degree price discrimination (as this would be) invariably increases overall welfare
Now you could answer these questions, or you could ask me too to get a job. Don't bother, I do already have a fairly decent one. I ridicule idiotic behaviour in my free time for the kicks of it
Like this guy!
And let's assume 3 and 4 have jobs, one of those nice, cushy well paying jobs that you probably went to law school to get (assuming you are one of those 5 kids). Does that change the merit of their questions? I'd genuinely hope not
Adding to those questions, doesn't the ability to label the "same product" (this is in quotes because there are service and cost differences in the product) with different MRP's actually keep the price down in the outside market (as opposed to movie halls and the like)? There's this concept of price discrimination, and second or third degree price discrimination (as this would be) invariably increases overall welfare
Now you could answer these questions, or you could ask me too to get a job. Don't bother, I do already have a fairly decent one. I ridicule idiotic behaviour in my free time for the kicks of it[/quote]
Like this Guy!
It's not all corporate out there.