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Old 2nd May 2009, 20:03   #1
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Default Soft Drinks, no extra service but extra charge.

Why do outlets like Subway charge us more when they serve us soft drink pet bottles.

The MRP is 22
They charge us 50 bucks.

No extra service is rendered. It not like the drink was served in a glass or tumbler. They added no ice or garnish to the drink.

To simply give you a pet bottle a premium of more than 100% is charged.
Is it legal or fair.

Can they get away with this in other countries.
Soft Drinks, no extra service but extra charge.-img007.jpg
Soft Drinks, no extra service but extra charge.-img009.jpg


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Old 2nd May 2009, 20:17   #2
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IMO, you should know the price before paying for a product. If it works, you pay. If it does not, you don't, as simple as that.

Similar to your query, why does a simple veg sandwich charged Rs.50 bucks at an airport or Rs.100 inside an aircraft which is served exactly the same way it is sold elsewhere for 10 bucks. There are several such examples of retailers fleecing customers.

Retailers are given a liberty to charge what they want but it is us consumers who take the decision to buy it or not !!!!
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Old 2nd May 2009, 20:20   #3
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Wasn't there a court ruling that beverages sold inside food outlets should not be charged more than the MRP?

But then, paying 100% more for the same stuff is outright silly and taking consumers for a BIG ride!!!
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Old 2nd May 2009, 20:31   #4
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Well, its a complex thing to explain. To begin with, let me tell you I never buy these cold drink bottles from places like Subway, Pizza Hut etc. Also, be aware that if you scrutinize the law the practice is illegal. No one is allowed to sell anything over and above the MRP. Remember, as it is, retailers in most places fleece you because the MRP is the max that one is allowed to charge inclusive of all the costs incurred. So obviously the price should remain within MRP even in remote mountains where they take stuff on mules etc. and run the refrigerator on diesel generators as electricity supply is erratic. Obviously the MRP is arrived at taking the maximum of such costs that retailers may incur. MRP is NOT the price at which everyone must sell. And selling above the MRP is always an offence.

Now about why these guys sell the bottles at such inflated prices. See, when you buy a Sub for 120 bucks (that too a 6 incher) the price subway would have incurred in making that sub wont have been more than 20 bucks at the max. So you see the profit margins? Well, not exactly. While material cost is one thing they also have other overheads. Huge license fees to pay, Subway class salaries for its employees, costly ads to run and of course open outlets in premium malls etc. Obviously they need to make obscene amount in markups so that they can cover all these costs and still make a good profit.

Now, if they sell that bottle for 22 bucks what will they be left with? They can not afford to sell such low margin products from their outlets. And yet they can not shun these things, again for obvious reasons. So the solution is to sell the bottles at huge prices.

I hope you now see the reason. My solution? I never order these from such places. Last week I ordered bulk quantities of Pizzas from Pizza Hut (corporate order). And yet I refused to order the coke from them as they wanted 30 bucks on that 22 buck bottle. Instead I placed the order with our canteen guy who happily supplied me at 22 bucks each bottle. For me that meant a saving of 640 bucks.

Last edited by Zappo : 2nd May 2009 at 20:32.
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Old 2nd May 2009, 20:34   #5
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Dominos sells specially bottled soft drink bottles which cost 30 Rs, and add tax to that. They even have combo pffers which make it sound like you're getting a good deal, but still cost more than the induvidual item + the bottle from elsewhere. When asked about the issue, the company response was
"we dont sell goods above MRP"

yes, its a ripoff. But what can we do about it ? Apart from not buying it?

Last edited by greenhorn : 2nd May 2009 at 20:41.
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Old 2nd May 2009, 21:10   #6
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I think Zappo has hit the nail on the head. These places have huge overheads. Ever figured why your 'bhandiwalla' sells you tea for Rs.3/- while you pay nothing less than Rs.300/- in a 5*? (After all the taxes, charges etc.) I will add things like decor, air-conditioning etc. to the costs that Zappo has already listed.

Airports & Planes have a different story to tell.

Airports (as well as bus-stands, railway stations, movie theatres etc) levy a really huge 'license fees' from vendors for the space they are allowed to use. The license is normally for a short period, so the licensees (soft drink seller) has to recover his license fees and capital costs within that short time.

Serving food on aeroplanes is expensive. The caterer has to be paid a charge over and above the material cost, the airport has to be paid for the use of catering facilities and high lifts, the aircraft handlers have to be paid for putting things on board, taking things out and cleaning the mess. Add to this the wastage factor. The wastage of food is huge in airlines. Once food is despatched from the flight kitchen, if it is not consumed on board - it has to be thrown out. The logistics involved in off-loading it and re-routing it onto another plane are daunting.

While it might not be legal to sell above the MRP (if the drink is in the same container) and, it is on the borderline ethically, this practice is eminently practical. (Ever wondered why hotels insist on serving your drink in a glass or decanter even though you much rather have it straight from the bottle?)

Cheers
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Old 2nd May 2009, 21:19   #7
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Quote:
Originally Posted by bblost View Post
Can they get away with this in other countries.
In the US, there is no price printed on 90% of all items. So shopkeepers can sell anything for any price they want. Same item sold for 1$ today may be 2$ in the same shop the next day. On the same day, 2 neighbouring shops may have a 100% price difference.

With the increase in number of big box retailers in India, I am pretty sure they will get around MRP very soon in India.
It can be done very easily - print a very high price on the product & so everybody sells at a price they feel right & everyone still sells below MRP. For eg. Print Rs.50 on a bottle of Sprite.

Last edited by carboy : 2nd May 2009 at 21:21.
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Old 2nd May 2009, 22:20   #8
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Quote:
Originally Posted by bblost View Post
Why do outlets like Subway charge us more when they serve us soft drink pet bottles.

The MRP is 22
They charge us 50 bucks.

No extra service is rendered. It not like the drink was served in a glass or tumbler. They added no ice or garnish to the drink.

To simply give you a pet bottle a premium of more than 100% is charged.
Is it legal or fair.

Can they get away with this in other countries.

Quote:
Originally Posted by greenhorn View Post
Dominos sells specially bottled soft drink bottles which cost 30 Rs, and add tax to that. They even have combo pffers which make it sound like you're getting a good deal, but still cost more than the induvidual item + the bottle from elsewhere. When asked about the issue, the company response was
"we dont sell goods above MRP"

yes, its a ripoff. But what can we do about it ? Apart from not buying it?
Hi. Nirula's has lost a case in the Delhi high court on the exact same premise. If the bottle is marked with an MRP of Rs. X, the retailer can only sell below that price point. The magic workaround to this rule is printing "For Sale Through Special Channels Only" and marking the MRP as requested by the retailer.

e.g. at Worlds of Wonder (aka W.O.W.) in Noida, pepsi cans are marked @ 45 a piece.

However, if you're handed a bottle marked at 20/22 bucks, but given a bill for 22+xyz, you can either tell the counter boy you're suing them in the consumer court; that Nirula's has lost a similar case. or...

If they don't relent (Usually they do), you can:
1. Not buy the drink and forget about it. Sulk at home. Life isn't fair.
2. Buy the drink. Forget about it. Its just xyz bucks.
3. Buy the drink, get the bill, sue their Arse.
4. Buy the drink, get the bill, write to the franchisee/manager.

and btw, I think its justified. I won't spend 3+crores on a fast food joint and sell you soft drink at street price. But thats me, I probably am EVIL.
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Old 2nd May 2009, 22:41   #9
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I know of one case in PVR Saket, Delhi where a consumer sued him for charging Rs.50 for a water bottle and he won the case too.

So not sure if the charge as per MRP rule is applicable only for basic amenities items and not applicable for luxury good ( if in case a soft drink falls in that category)
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Old 2nd May 2009, 23:22   #10
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Delhi high court stopped this for some time, and heard the case. Unfortunately the guy who did the case lost, and court verdict was that the place can charge for Ambience too.
So 22rs is for the PET bottle, and 38 rupees is for the honour of standing inside subway.
Its a free market, you don't like it, take your business elsewhere.
Don't bother knocking the doors of a court, you will lose again, and if that still irks you do what I do. I make them put the cold drink in a glass and put lots of ice in it.
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Old 2nd May 2009, 23:34   #11
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wasn't there a case where the outlet changed to "drink price - x, cooling price-Y"

and you pay the sum, or buy it at room temperature,
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Old 2nd May 2009, 23:44   #12
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Zappo's true.

Plus now most bottles (Subway seems lazy) say sold in airport/halls already include an inflated MRP.

They do it worldwide.

Let me give you a different perspective - even if u bitch, tomorrow the bottle will come printed with special channel MRP Rs 50 - net net, you will still pay.

So seedhi baat karo, and buy one from nearby kirana store before entering subway
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Old 2nd May 2009, 23:49   #13
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This is where they make the buck!
I always make it a point not to buy softdrinks from Hotels/Restaurants.

Its same with everyone from Dominos to MacDonalds, Pizza Hut, etc.
No country made outlet is giving competition to the big guns, had there been some worthy alternatives, prices could have been lower.
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Old 3rd May 2009, 00:13   #14
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Quote:
Originally Posted by vivekiny2k View Post
wasn't there a case where the outlet changed to "drink price - x, cooling price-Y"

and you pay the sum, or buy it at room temperature,
This is a common practice in some cities.Especially coimbattur.The justification is "electricity charges"!
--
On the topic ,I feel in future MRP thingy will not be cared by the shops.Already as said above ,some of these stores are so adamant on charging extra.
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Old 3rd May 2009, 00:47   #15
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Quote:
Originally Posted by vivekiny2k View Post
wasn't there a case where the outlet changed to "drink price - x, cooling price-Y"

and you pay the sum, or buy it at room temperature,
This is especially true in summers. It is almost like they want us to pay for their electricity bills
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