Surya Morphy gets a clean chit

Richa Mishra

NEW DELHI, Nov. 6

SURYA Morphy Richards Ltd, manufacturer of Morphy Richards irons, has been given a clean chit by the Monopolies & Restrictive Trade Practices Commission (MRTPC).

The Commission was considering an application made by the Director General (Investigation & Registration) (DG(I&R)) charging the company with adoption of and indulgence in restrictive trade practices.

It complained that the company, in order to promote the sale of these irons had launched a scheme of free offer of one Stencil executive shirt worth Rs 175 on the purchase of a Morphy Richards iron. An advertisement to this effect appeared in July 1993.

The terms and conditions of the scheme stipulated that the offer was valid only in Delhi and Haryana for 30 days from the date of the first advertisement or till the stocks lasted, whichever was earlier.

The company, while denying the charges, stated that the scheme was launched in order to promote the sale. Although the retail price of the shirt was Rs 175 it purchased the shirts in bulk, from Stencil Apparel Brands Ltd, at a price of Rs 82 per shirt. This amount was to be shared in the following manner _ Rs 37 per shirt by the manufacturer of the irons, Rs 20 per shirt by the distributor and Rs 25 per shirt by the dealer and retailer, the company said.

It was also submitted that the gift was given to the consumer who purchased any Morphy Richards iron. The impugned trade practice was not prejudicial to public interest or the interest of the consumers as it was offered free and it also did not have any adverse effect on competition, the company said.

The Commission noted that as there was no evidence that there was an agreement between the company and its distributors or retailers regarding any discount, rebate or credit which was given in connection with or by reason of dealings, the impugned trade practices cannot be construed to be restrictive.

There is also no evidence that under the impugned scheme goods were sold at prices which would have the effect of eliminating competition or the competitors.

``On the other hand, it appears that under the impugned scheme on the purchase of an iron, a free shirt was offered to the consumer who paid the price of the iron only and got a shirt worth Rs 175 free, in the bargain,'' the commission noted.

It also transpires that the cost of the shirt was shared by the company, and the dealers and retailers as a sales promotion measure and was not to be recovered from the consumer.