Dear Sir
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 use of
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 the last one year or so and the poor
consumer, not so vigilant to notice such maneuverability, who is already
reeling under pressure of rising prices,is paying effectively higher price
for the same weight, which is also not reflected in the WPI and
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.'
With the above notification of the amended Rule 5 ibid and the provision
added there to, the packaging of items in standard weights of
25,50,100,125,150,175,200gms or so as per standard weight for the commodities
specified in the Third Schedule of the Rules ibid was practically dispensed
with and the poor consumer left at the mercy and the clever marketing
techniques of not altering RMP but reducing the Weight with declaration as
per proviso ibid. Astoninishingly, it was safely presumed by the GOI that
the poor consumers, who are mostly illiterate but very much price conscious
would read in between the lines the declaration that too mostly in English,
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, taking undue technical advantage there of,
started to pack with non standard weight and reduce weight without reducing
price and 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 rising input costs to
consumers by reducing weights of packaged products, while keeping their prices
unchanged, has, as perearlier press reports, contended that the reduced
weights are per force indicated on the packed items to comply with the recent
changes in the Packaged Commodities Rules, which require inter alia to indicate
net weight so as to factor in any weight loss due to weather changes. The
Federation’s contention is not relevant and correct and is 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 amendment to 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, 2007 became 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 commodity but 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 thereto introduced
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 Rules ibid and any increase in the input costs would then be
reflected transparently in the RMP and then taken care in WPI for arriving at
changes in inflation rate.
Unless we make the above issue a mass consumer protection movement and involve
NGOs, Consumers' organisations, press, media, T.V., i doubt if GOI will easily
restore Rule 5 as it existed prior to above notification No 425(E) Dt.
17.7.06. Even PIL can be filed by some Conumers' Forum. We can also consider
to seek information from GOI under RTI in regard to circumstances under which
it 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
Mob: 0 98 2132 0852
