New stricter laws, fines to enforce MRP under Consumer Affairs Act passed in Parliament

The Parliament yesterday unanimously passed new laws under the Consumer Affairs Authority Act No. 09 of 2003, to increase fines for the sale of goods above the maximum retail price (MRP).

This will now allow to raise the fines by 3,900% for breaking the MRP. As per the provisions of the Act, the fines are categorised as individual businesses and companies.

Unavailability of proper discourse, which otherwise is common at a Bill debate, compelled the Cooperative Services, Marketing Development and Consumer Protection State Minister Lasantha Alagiyawanna to urge both Opposition and Government MPs to pose questions or make suggestions to protect the consumers. “Around 90% of the traders are good. Through the new increases we want to rectify the balance 10% who are only concerned about their profit regardless of the pandemic situation,” he said.

Acknowledging that the MRP created a shortage of goods in the market, the State Minister said the Government intends to move beyond price controls and create a market-driven price mechanism to protect the consumers in futures.

In August, President Gotabaya Rajapaksa declared emergency regulations and appointed the Essentials Services Commission to counter the hoarding of sugar, rice and other essential foods.

Accordingly, the maximum fine charged from an individual business for a first-time offence has been increased from Rs. 10,000 to Rs. 500,000.

Individual businesses will be fined a maximum of Rs. 1 million for a subsequent offence. This amount previously stood at Rs. 20,000.

The maximum fine for a company for a first-time offence has been raised from Rs. 100,000 to Rs. 5 million. The maximum fine imposed on companies for a subsequent offence has been increased from Rs. 200,000 to Rs. 10 million.

The Cabinet of Ministers approved amendments to the Consumer Affairs Authority Act No. 09 of 2003, with several legal provisions aimed at increasing fines and jail terms against errant traders to reflect the present-day requirements to protect consumers. 

The Government has defended the enforcement of the emergency regulations to deal with the food crisis, though the move has come under heavy criticism from the Opposition.