Maximum Retail Price

Back in India, I took Maximum Retail Prices for granted. I took it as my right, argued with shopkeepers, walked away without buying anything, thinking that I won.

I had stayed so many years in India, and I don’t think I ever saw an argument against MRPs. There have been groups of intellectuals demanding free pricing for petroleum products, freeing up this, freeing up that,… I never read anything about doing away with MRPs. Maybe I just missed those debates? Or maybe I was just naive to have not understood it when it came up?

Google searching now gives me some hits, but not too many. Am I searching the wrong keywords? In fact, wikipedia does not have a page on “Maximum Retail Price”.

The US doesn’t have MRPs — they do have things like Suggested Retail Prices etc, but in general the Retailer can sell the products at any price he wishes to. The first time I had gone to a groceries here I was quite shocked—I had no idea about the *real* price of the goods, so I couldn’t decide whether or not to choose another store.

The Indian store at Penn sells goods brought from India, but waaay above the Indian MRP. :-)

Here’s the thing: if I’m a retailer in India, why would I choose a rural area to set up a store? Of course, I would choose it because I would have a monopoly and I could exploit the villagers with my exorbitant prices. Otherwise there isn’t any profit in setting up businesses in villages (less business, plus higher transportation costs, somethings gotta make up for that). Surely, they’ll prefer buying goods at higher prices than going to the cities to buy quality goods? If some of them don’t want to buy from me, then that’s up to them — but something is better than nothing.

Illiteracy could cause problems, my store would probably be burnt up within a few days.

Anyway, I don’t think the Government of India keeps track of my blog, so this isn’t going to help anybody. And I don’t want to be that person who thinks he can fix everything. :-)

(Let me know if I’ve got any information wrong.)

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2 Responses to Maximum Retail Price

  1. anshul says:

    I do remember the days when many things used to sell way above the printed price (because mrp wasn’t tightly enforced or didn’t exist) and you had to bargain all the time… Now things are mrp or below mrp and life is good.

    The problem with letting things go wild is that if enough care is not taken, the parasites have a good chance of being successful.. In Indian villages it would be trivial to bribe the authorities to ensure (by illegal force) that another store doesn’t open and then charge arbit.

  2. […] a book he wanted to buy. When he asked the price the woman initially asked for more money than the MRP. Then, on asking her if she was joking, she quoted a price 50% of MRP. We […]

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