Footwear retailers asked to display MRP on cartons

In the largely unorganised footwear market of Agra, retailers are offered as high as 100"�150 per cent margin on sales by the manufacturers, amounting to a large-scale discrepancy in rates in the domestic retail market.

In an effort to regulate the footwear retail segment in the country, the department of central excise has issued orders necessitating the printing of Maximum Retail Price (MRP) on footwear cartons.

In a meeting called by the joint commissioner (central excise), Digvijay Kumar, on Wednesday, the Agra footwear manufacturers, stockists and retailers were instructed to ensure that no footwear was sold without specifying the MRP.

The order is to ensure that the footwear retailers do not make excess profits by overpricing the goods.

This order is meant for all footwear-manufacturing units in the country, organised or unorganised. Any footwear sold without MRP printed on the carton will be immediately confiscated.

Commenting on the regulation imposed on the footwear trade by the Central Excise Department, the managing director, Park Exports, Nazeer Ahmed, said this order would affect only the domestic retail market and it would not have any implications on the overseas exports, as the goods which are exported already have their prices mentioned in the export documents.

But the local retailers and trading houses have objected to this order, terming it as an attempt to destroy the footwear trade, especially in Agra.

Talking to Business Standard, the proprietor of Jones Traders, Waseem Ahmed, a local footwear stockist, said the reason why the Agra footwear units were able to sell in the domestic market despite its relatively low quality, was that the retailers were offered good profit margins of up to 100 per cent by the manufacturers and if their margins were limited, they would avoid buying in Agra and would instead prefer selling branded footwear where they received assured returns.

He said that the Agra footwear trade fell mostly in the unorganised sector, with 80 per cent of the units achieving a turnover of less than Rs 1 crore and such units had already been exempted from excise duty so there was no reason why they should be forced to print the MRP of their product.

According to Ahmed, the order, if implemented, could bring down the sales of Agra shoes in domestic market by more than 50 per cent while the larger, branded manufacturers in Delhi, Chennai etc. would greatly benefit from the drop in Agra shoe sales.