As the rules mandated by the government from the pricing of products & services, Identical items shall not be priced with differents retails prices. However, at the airport, you ought to pay a much higher amount for an item that you pay in the city market. May it be a water bottle, a bar of chocolate or any other item from the concessionary shop. But have you ever given it a piece of your mind that what allows these manufacturers and service providers to charge different rates for the similar product and services available at different outlets?

If you go on to inquire about the Legal Metrology Act Packaged Commodities Rules 2011, which are responsible for governing the provisions of pricing products and services at MRP. ( Maximum Retail Price), it went through an amendment in the year 2011 which states that it is compulsory that a company manufacturing products or providing services cannot apply dual MRP to identical pre-packaged commodities. This was effective from 1st January 2018. However,  the said provision does not apply where there is a variation to the products & services in terms of quality, quantity, packaging etc.

Companies get benefitted by this clause’s exception by pricing similar commodities at different prices and sell different packs across different retail and trade channels. This gives them an opportunity to generate profit by using cost variation techniques. The companies make products in different sizes and stock them in separate units which goes on to be distributed in different retail channels.

The Airport Authority of India (AAI), has asked the concessionaires (retail shops at the airports which hold grants & subsidies) to sell the products at MRP applicable & not at any price above that. They had informal meetings where it was asked by the Airport Authority of India that the concessionaires should charge suitably for food and beverages, to make them affordable, especially in smaller cities.

However, if we look at other factors, hotel & restaurants can sell bottled water at higher rates because they are not governed by the stated provisions of the Legal Metrology Act. Further, if we try to look at the matter from concessionaires’ point of view, they are paying the real estate rents at 5-6 times higher rates. Hence, it makes it reasonable for them to charge for products at a higher rate because they are making things available to you at such a mobile place from where you have no other option. Also, the recent tax system that changed from conventional taxing system to modernised GST has also affected the MRP to a good extent.

Even after all these situations, AAI’s act of trying to serve customers at the Airport in a better way is praiseworthy. We hope this will have a favourable output for everyone.