Consumer authority urges transparency as retailers are free to set prices under the free market system, but tampering with MRP labels is prohibited
TIL BDR GHALLEY | Thimphu
Since the Goods and Services Tax (GST) was introduced, people have been asking how prices are decided for products with Maximum Retail Price (MRP) labels. Many are worried whether GST is being added on top of these prices and if the government will set reference prices to avoid overcharging.
The concept of MRP has long been a source of confusion among consumers and businesses in Bhutan, largely due to the country’s reliance on imported goods from India, according to the Competition and Consumer Affairs Authority (CCAA).
Ugyen Penjore, Director General of the CCAA, clarified that Bhutan does not legally operate under an MRP system, despite the prevalence of MRP labels on products in retail stores. “The concept of MRP is widely misunderstood, in fact in Bhutan we don’t have concept of MRP,” he said.
He explained that the confusion arises because most consumer products in Bhutan are imported from India, where the MRP system is widely used. “But because of most of our product is coming from India, these MRP is a system use in India and that’s why when product come to Bhutan we still see in MRP,” he said.
While MRP labels are visible on imported products, they do not legally bind Bhutanese retailers. “We don’t have any relevance to what the shopkeepers or business owner do on MRP do MRP on It,” he added, emphasizing that Bhutan’s pricing framework operates independently of MRP regulations.
Under Bhutan’s Consumer Protection Act, MRP is intended to guide consumers on the relative value of products rather than enforce a price ceiling. “As per our consumer protection act you should not scrub but it should be use as a guide for the customer to know what is the actual values, or relative values of the product,” he said. He noted that while retailers may set prices above the MRP, they are prohibited from altering or hiding the labels. “They will be able to set the prices of the product on top of the MRP; however, they are not allowed to scrub the MRP or hiding, slapping, bombing, or tagging on MRP is not permitted.”
The authority has expressed concern over instances in which MRP labels are tampered with, stressing that such actions undermine transparency in the marketplace.
The CCAA, encouraged consumers to report violations. “And if such instances are happening, he encourages customer to file a complaint to consumer protection office,” he said.
This clarification comes at a time when consumers continue to question discrepancies between MRP labels and actual retail prices, particularly for imported food items, household goods, and electronics. The CCAA emphasized that enforcing uniform pricing across all products is neither practical nor aligned with Bhutan’s free market economy.
“It is impossible to set price to all the products,” he said. He stressed that market forces, rather than government intervention, determine pricing. “We are working free market economy and government should not be involve in setting prices,” he said.
He further highlighted the challenges of introducing reference prices, citing the dynamic nature of consumer goods. “If we make references prices also it will be impossible as prices keep on changing, brand keep on changing, the features keep on changing, product packaging size keep on changing so it would be a never-ending task,” he said.
According to him, the frequent changes in product features, packaging, and branding make centralized price-setting impractical, reinforcing the role of MRP as an informative guide for consumers rather than a regulatory tool.
According to our Consumer Protection Act, when you purchase items worth Nu 100 or more, businesses are supposed to give a receipt. The receipt is useful for consumers in case a product is faulty, spoiled, or if you are looking for a replacement. This acts as evidence of purchase from that particular business,” he added
The CCAA has maintained that retailers are free to price goods according to market conditions, costs, and other business considerations, provided that MRP labels are not concealed or tampered with. The presence of MRP labels, though non-binding, allows consumers to make informed comparisons across products and brands.
As Bhutan’s market remains heavily dependent on imported goods, MRP labels are expected to remain a common feature in retail stores. The CCAA, however, reiterated that their presence does not imply government-mandated price controls. “Under Bhutan’s Consumer Protection Act, MRP serves as a reference for consumers, providing guidance on the relative value of products rather than acting as a price ceiling or controlling what retailers can charge,” he said.
By clarifying the role of MRP and reaffirming the country’s commitment to a free market economy, the authority aims to address misconceptions and strengthen transparency in consumer transactions. It encourages consumers to stay vigilant and report violations, ensuring that businesses comply with existing legal provisions while continuing to operate freely within the market.
