Price Fixing - Inputs on Root Causes

Dear Friends,

Price Fixing is something that Indian consumers suffer from quite often. When suppliers collude and agree to artificially raise prices to maximize profits, the consumer is negatively impacted.

Based on your inputs, below are the key issues related to price fixing.

Please review them and help outline the Root Causes for these Issues. Once done, we will review the Solutions in a separate post.

Our objective would be to submit a whitepaper on the subject to the consumer and competition bodies for due action.

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Price Fixing – Issues

1. A nexus between wholesalers and retailers
2. The price of medicines are set high, which makes affordability difficult for the masses
3. No control on the prices of fruits and vegetables
4. Hoarding of items like grains, pulses and spices also leads to fixing of prices
5. It is a normal practice to offer 30% to 90% discount on crackers during Diwali on MRP. So MRP has no meaning
6. Mostly prices om imported computer items like hard disks pen drives memory cards etc. is always too much
7. Mediators play a major role in fixing prices
8. A farm produce becomes 10-20 times costlier when it reaches the retail customer
9. Customer has to shell out more money to buy a product that its actual cost
10. Goods become costlier and inflation rises more  

View all 27 comments Below 27 comments
1. From the simple farmer to the consumer , there are various un-intended stages involving additional forced cost to the consumer. Minimize or remove unnecessary stages which just enhance the cost, without any added value. more  
Unfair inputs are available Can we abolish the availability of unfair inputs These unfair inputs are the seeds of all these problems more  
Some years ago when we visited USA, we had to go to New York from Pittsburg,PA.
We wanted to try the rail service as the journey involved only about 8 hours by train.
My wife and I got some concession in trainfare being senior citizens. As soon as we
approached the platform, one Railway employee in uniform approached us and
collected our luggage,and carrying our luggage guided us to a good compartment
kept the luggage in place and wishing us happy journey took leave of us. All free
service and he never waited for any tips.

Whereas recently in Bangalore we wanted to board the Mysore-Chennai Express at about
11 pm. I am aged 82 years and have orthritic knee pain and cannot afford to move
fast in the platform. I enquired with the station master on duty where the AC II
coach will be, whether in the front or at the back. He bluntly replied he cannot
provide the information and asked to go to plarform No.5 and check with the porter.
This is the attitude of railway employees in India. Can it be changed? more  
R P GUPTA JE:

You need to be very soft and extra careful on PRICE FIXING FOR SENIOR CITIZENS.
YOU can also study the other countries how much they are sympathetic and considerate for their Senior Citizens-dole, free facilities, respectful and convenient graceful WELCOME in the society. more  
1. Unregulated markets
2. Absence of healthy competition
3. Supply side constraints enabling price fixing
4. Monopoly/near monopoly in many products/services - including public sector
5. Rent seeking by license/permit givers causing high price fixing by the licensees to recover costs more  
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