KATHMANDU: Although the law allows sellers to offer discounts on the Maximum Retail Price (MRP), many businesses continue to charge customers the full amount — and sometimes even more — in violation of consumer protection laws.

On September 22, a market inspection by the Department of Commerce, Supplies and Consumer Protection found that Sugam Pharmacy in New Baneshwor was selling medicines at inflated prices. After confirming the discrepancy, the Department fined the pharmacy Rs 20,000 under Section 39(e) for engaging in unfair business practices.

Similarly, Sitaram Gokul Milk Pvt. Ltd., based in Kirtipur, was fined Rs 250,000 after it was found selling its dairy products with price stickers that exceeded the printed MRP. According to Director at the Department, Bharat Acharya, the products were being sold with new, higher-priced stickers — a clear case of consumer fraud.

In another case, BM Enterprises in Lalitpur was penalized for selling goods at arbitrary prices. These are just a few examples of the ongoing violations the department has uncovered during its regular market inspections.

The government mandates that all domestically manufactured and imported goods must carry MRP labels. Section 6 of the Consumer Protection Act requires manufacturers to include on their labels the product name, address of the manufacturer, industry registration number, ingredients, quantity and weight, MRP, batch number, and the dates of production and expiry.

These details must be clearly printed in either Nepali or English and must be easy for consumers to understand.

Retailers are also obligated to sell products without tampering with or concealing the MRP labels. However, officials from the Commerce Department say they continue to find cases where sellers remove or cover up original MRP labels, especially during festivals, and sell products at inflated prices.

Even when products are sold at the stated MRP, consumers are often unaware that this price includes room for discounts. The MRP takes into account production costs, marketing, transportation, taxes, and retailer profit margins. It is the maximum amount a consumer should pay — not the mandatory price.

Despite this, many sellers consistently charge the full MRP and argue that discounts are not possible because the price is fixed by the manufacturer. In reality, consumer rights laws allow for discounts within the MRP.

Consumer rights activist Jyoti Baniya explains, “Selling a product at MRP means charging the same price whether the item is sold in Birgunj or in Humla. But this doesn’t reflect reality. A customer in Birgunj shouldn’t have to pay the transportation costs needed to get that product to Humla. This results in unfair pricing and consumer exploitation.”

Large department stores and shopping malls are also known to charge customers the full MRP without offering any discounts. Some stores even sell products by covering the original MRP labels with their own price tags. For example, a shop named Sprit in Labim Mall, Lalitpur, was fined Rs 51,000 after being found guilty of such practices.

Many commercial outlets also fail to provide proper invoices for purchases. Even when invoices are issued, the products are often sold at the maximum printed price, with no discount offered — despite the fact that MRP allows for such reductions.

Department stores and shopping marts — including Bhatbhateni, Bigmart, Safal Mart, Mega Mart, and others — continue to argue that they do not offer bargaining or discounts on the Maximum Retail Price (MRP) of goods. These retail giants attract large crowds, especially during festivals and special occasions, often launching promotional schemes to lure customers. However, they remain firm in their policy of selling goods strictly at MRP, with no flexibility for discounts.

Despite rising criticism, the Department of Commerce, Supplies and Consumer Protection appears to treat selling goods at MRP as a legitimate practice. In fact, the department has been actively campaigning to affix MRP stickers on all goods available in the market — a move that, according to consumer rights activists, indirectly encourages sellers to charge customers the maximum allowable price without offering any relief.

Consumer rights advocate Baniya calls this practice “another form of fraud.” He argues: “Affixing MRP stickers should not mean denying customers the right to negotiate or receive discounts. Enforcing the MRP as a fixed selling price effectively legitimizes consumer exploitation.”

In 2022, the Ministry of Industry issued a notice mandating MRP labels on all goods starting from April 2024. This rule was part of a broader effort to standardize pricing and improve market transparency. However, after Kumar Prasad Dahal took over as Director General of the Department of Commerce in February 2025, the enforcement of this mandate intensified.

Under his leadership, the department ramped up monitoring and imposed fines on businesses violating the Consumer Protection Act. But this enforcement soon sparked backlash. Business associations, including the Nepal Chamber of Commerce and Industry, Birgunj Chamber of Commerce and Industry, Morang Chamber of Commerce and Industry, and Siddhartha Chamber of Commerce and Industry, jointly protested, arguing that applying MRP stickers to all products — especially locally manufactured and imported items — was impractical.

Under growing pressure, Director General Dahal was transferred to the National Inclusion Commission in mid-July, less than six months into his tenure.

Officials at the Department of Commerce say some retailers have gone beyond selling at MRP — in fact, they’ve been selling goods at higher prices by tampering with or replacing the original labels. Former department officer Gayatra Shrestha confirmed that during market inspections, they found large importers and wholesalers deleting the original MRP and setting inflated prices in their warehouses before distributing goods to retailers.

This manipulation, coupled with a lack of transparency in cost structures, has made it difficult for regulatory bodies to intervene effectively.

Flawed legal framework

Nepal’s Consumer Protection Act, was enacted with the goal of ensuring fair, transparent, and competitive commercial practices. However, rights activists and legal experts argue that the law’s vague definitions and lack of enforcement mechanisms have left major loopholes — which businesses continue to exploit.

While the Act states that the MRP should be determined based on “cost details,” it does not specify what qualifies as valid cost components. This ambiguity has led to inconsistencies in how production costs, marketing, logistics, taxes, and administrative expenses are calculated — resulting in arbitrary pricing.

Advocate and consumer rights activist Anantaraj Luintel explains: “In the absence of a clear definition of cost, businesses freely add non-essential or inflated overheads to the production cost. This allows them to artificially increase the MRP. As a result, similar products are sold at widely varying prices, fueling unhealthy market competition.”

Unlike countries such as India, where cost auditing is used as a regulatory tool in price setting, Nepal’s laws fail to provide any clear guidelines for cost auditing or verification. This leaves both consumers and regulators without a clear basis to challenge inflated MRPs.

Shrestha, the former commerce officer, adds: “Even if a consumer complains that the MRP of a product is unfair, it’s extremely difficult for regulatory bodies to determine the actual cost, verify the claim, or prove excessive profit margins. This weakens consumer protection and strengthens unfair market practices.”

While MRP labeling was introduced to protect consumers from overpricing, its rigid enforcement — without room for bargaining, discounting, or transparent cost structures — has become a tool for exploitation. Without legal reform and strict oversight, the practice of selling at MRP risks becoming another mechanism through which consumers unknowingly pay more than they should.

Low consumer rights awareness

Nepal’s Constitution guarantees the protection of consumer rights, and various laws have been enacted and implemented in line with this provision. Consumers are legally entitled to take action against unfair commercial practices and can seek redress through designated authorities.

However, consumer rights activists say that public awareness remains extremely low. Advocate and consumer rights activist Luitel notes, “Most consumers are unaware of their rights, and the government has failed to raise adequate awareness. Even when they face injustice, people rarely file complaints or seek help from the relevant authorities. This lack of action not only weakens consumer protection but also contributes to unhealthy competition in the market.”