The Directorate of National Consumer Rights’ Protection (DNCRP) has fined the British American Tobacco (BAT) and ‘Swapna’ with an amount of Tk 50,000 for selling cigarette at prices higher than the MRP (maximum retail price) printed on packets.
The BAT, the multinational giant tobacco company; and the ‘Shwapno’, a Bangladeshi supermarket chain; will have to pay the fine of Tk 25,000 each.
Mohammad Alim Akhtar Khan, director general of the Directorate of National Consumers’ Rights Protection (DNCRP); issued the order on Thursday (November 7, 2024) following a hearing.
Atia Sultana, a deputy director of the DNCRP; Jannatul Ferdous, an assistant director of the institution; representatives and lawyers of BAT and Shwapno; and representatives from Bangladesh Anti-Tobacco Alliance (BATA) were present at the time. During the hearing, all the documents provided by the BAT and ‘Shwapno’ and the allegations of selling at prices higher than the MRP rate were proved.
Mohammad Alim Akhtar Khan opined that the contract between BAT and ‘Shwapno’ is faulty which goes against the law. Because their contract states that by buying cigarettes at the MRP rate, the Shwapno can raise the price.
The DNCRP DG asked the two organisations to revise their contract in four weeks. He, however, warned against selling cigarettes at prices higher than MRP in future.
During the hearing, he said that no product can be sold at a price higher than the MRP rate. The cigarettes must be sold to consumers at the MRP rate.
He also announced a crackdown on other companies selling the packets at higher prices than the MRP printed on the packet and also in the open market.
Tobacco control advocates and anti-tobacco platforms in Bangladesh welcomed the steps of the Directorate of National Consumer Rights’ Protection (DNCRP).
Dr Rumana Huque, a professor of Economics at Dhaka University and convener of the Bangladesh Network for Tobacco Tax Policy (BNTTP); said that the action taken by the DNCRP will play a vital role in bringing the cigarette market under the rules and regulations.
It will contribute to public health improvement by making an effective contribution to the tobacco control in the long term. She thanked the DNCPR for this step.
Welcoming the DNCPR for the move, Saifuddin Ahmed, coordinator of Bangladesh Anti-Tobacco Alliance; said that the move will ensure the sale of cigarettes at MRP rate and will stop the tobacco companies from making undue profits. This is positive for tobacco control, he said.
Talking to The Bangladesh Post on Friday, Syed Mahbubul Alam, a public health and environment policy expert and secretary of Center for Law and Policy Affairs-CLPA; said that although all products are sold at the MRP across the country, the tobacco companies are not following. The tobacco companies are selling cigarettes to retail sellers at MRP, and sellers are then selling cigarettes to consumers at higher prices. As a result, the government loses thousands of crores of revenue every year. It must be stopped. The DNCPR’s action against the BAT and ‘Shwapno’ will play a positive role in this regard, he added.
The Directorate of National Consumer Rights’ Protection (DNCRP) recently carried out a drive to an outlet of ‘Swapna’ and found that BAT-manufactured cigarettes were being sold at prices much higher than the maximum retail price printed on the packet.
During the drive, the ‘Swapna’ was fined Tk 50,000. Later, the DNCPR held hearing as ‘Swapna’ objected to the penalty.
It is alleged that although all products are sold at maximum retail price (MRP) in Bangladesh, tobacco companies sell their products, especially cigarettes, at prices higher than MRP. It is violation of the Consumers' Right Protection Act, 2009.
However, the tobacco companies are evading revenue of up to five thousand crore every year through illegal trading. A study of Bureau of Economic Research (BER) of Dhaka University and the BNTTP shows that government loses Tk 5000 crore revenue in a fiscal year (FY) due to the sale of cigarettes and bidi at MRP rate by the tobacco companies.
The study shows that the maximum retail price of 20-stick packet of premium tier cigarette is printed on a packet at Tk 270, which is sold at an average price of Tk 294.29, while high tier cigarette packet is sold at an average price of around Tk 229.88 instead of Tk 204, middle tire at Tk 136.86 instead of Tk 126 and low tier at Tk 95.15 instead of Tk 78. The bidi is also being sold at a higher price than the MRP rate.
