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Sambhar Mafia - Cooked To Kill!

Thursday, May 25, 2006

MRP: Who Pays The Price?

Most retailers know that it is very difficult to enforce Maximum Retail Price (MRP) and hence they openly violate the rules. It is very common to see your neighbourhood shop charging more for a soft drink just because the retailer has to spend for refrigerating the soft drink. To the best of my knowledge, the MRP fixed by the manufacturer includes the cost of refrigeration as well. Given that the premium we pay is not much, we don’t raise any noise.

Multiplexes are notorious for charging exorbitant prices for snacks and refreshments. One reason for this could be the huge rental paid by the snack shop to the movie hall (in case the movie hall doesn't own the refreshment stall). The snack bar owner has no option other than to pass on this burden to the end customer. Although you cannot do much about the price of the popcorn (since most of them might not be governed by the MRP norms), you can atleast do something about the drinks sold there. The MRTPC has cracked down on Delhi’s PVR Cinema for selling mineral water at a price higher than the stipulated MRP. I don’t think the other movie halls across the country are going to treat this as a warning signal. The penalties charged by MRTPC may not be much and hence the movie halls would continue to charge higher prices till they get pulled up by the MRTPC. I’m not too sure whether the soft drinks sold inside the multiplex are also governed by the norms of the MRTPC. If that were the case, movie halls could be at the receiving end once again.

7 Comments:

  • timely writeup

    By Blogger ashok, at 1:11 PM  

  • multiplexes charge high prices for tickets too!! its been sometime since i had snakcs in cinema theatre.

    a pirated dvd costs 60 bcks, the ticket costs 80 bucks, and id rather rather buy the dvd. if the ticket prices were lower i think piracy cud be contained. and sometihng shud be done bout this too.

    and then parking fares. all multiplexes r a ripoff!!

    By Blogger ada-paavi!!!!, at 1:34 PM  

  • The concept of MRP doesn't exist in US. You get a 12 bottles of purified water for $2.99 in walmart, whereas one bottle of purified water for $4.00 in movie theathers or a theme park. Atleast in India, in Hamam soap cover you see MRP. No such thing as MRP in the consumer goods in US.

    By Anonymous gd, at 2:15 PM  

  • the other notorious ones are the shops at the airport. at mumbai airport, 4 yrs back, they charged 80 rupees for a Aquafina mineral water bottle. I refused to pay and backed off.

    later, when i was chatting with the gift shop guy he told that he was paying an exorbidant amount as rent per month.. i can't remember the amount now, but the amount was so very high for a shop of that size.

    By Blogger Chakra Sampath, at 6:43 PM  

  • even in US theatres, the price of 'snakes' is twice or 2.5 times the cost prevailing outside.

    By Blogger Surya, at 7:04 PM  

  • Nobody - that means nobody - is supposed to sell more than MRP. That's the reason why the Pepsi or Coke is poured into special cups and sold at a higher price. I remember Nirula's (not sure) being fined for home-delivering soft drinks at a higher price. It didn't deter anybody. But I think the reason why PVR in Delhi is being fined is because the price is tetra-attrocious there. A burger and Pepsi costs more than 100 bucks while its around 50 in other places. I actually had a huge argument on this with my marketing prof who supported huge prices. :-P

    By Anonymous Govar, at 9:58 PM  

  • After being in India for several months, I admit that the whole MRP thing seems odd to me. If you're in a fancy supermarket in a fancy part of town, why shouldn't the place be able to charge more for at least some of its items? They're paying more rent, and at least theoretically they're spending more month on the surroundings and on staff than a little mom-and-pop store would. I mean, I've hardly even seen any store selling things for less than the MRP -- do price wars ever occur here, or does everyone always pay the maximum?

    By Blogger John, at 8:13 PM  

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