“Jago Grahak Jago” is a very famous slogan heard in India for the Rights of the Consumers and the Consumer rights have been exercised diligently by the consumers time and again. Imagine, having a packet of biscuit which claims to have 16 pieces of biscuit, however in-reality contains only 15 piece. You as a consumer have two option, one which is very convenient, that is, ignore everything and eat all the biscuits present in the packet, second, file a complaint for such false claim made in the packet. Well, one of the consumer have filed a complaint against a Fast Moving Consumer Good(FMCG) Giant that one of the packets of the company’s biscuit brand contained only 15 biscuits, and not 16 as was promised on its wrapper and received 1 lakh as compensation for the missing biscuit. Consumer Courts have time and again implemented Consumer Rights through different mechanisms.
Today is the World Consumer Right Day and in this blog we are not only going to discuss the rights of the consumers, but also how such rights casts obligation on FMCGs and Food Business Operator (FBOs) to comply with the key requirements under various rules and regulations to ensure such rights are rightly exercised by the Consumers.
In India the Consumer Protection Act, 2019 aims to provide protection to the consumers and establish an effective mechanism in which consumer grievances can be addressed. Section 2(7) of the Consumer Protection Act, 2019 widens the definition of consumers.
“Consumer means any person who-
buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
hires or avails of any service for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such service other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person, but does not include a person who avails of such service for any commercial purpose.”
The definition is broad enough to include all offline or online transactions which are conducted through electronic means or by teleshopping or direct selling or multi-level marketing. Any person who buys a good / service and uses such goods/ service or let the beneficiary use the same, for a consideration paid / partly paid qualifies as a consumer, provided that such person does not buy these goods / services for commercial or resale purpose. So the food and other products(shampoo, soap, cream) we buy, the meals we purchase, or the services we avail at restaurants or catering service, categories us as a consumer for FMCG entities / FBOs.
The Act further lays down the different type of Consumer Rights available with the Consumers. Along with such rights, there are key obligations which are casted upon the FBO or a FMCG entities. Here are the key rights available to the consumer and some of the obligation which such entities (FBOs / FMCG) adhere to for implementing such rights of the consumers-
Consumer Right to be Protected and FBOs/ FMCG entity responsibility to ensure such Protection
Consumers have the right to be protected against goods and services which may be hazardous to the property and life of the consumers. To ensure the quality , safety and reliability of such goods and services, most of the manufacturers obtain registration and certifications as per Indian Standards. This ensure safety of consumers as well.
As a Food Business Operator offering goods or services to Consumers, it becomes crucial to mandatorily fulfil the compliance requirement as per the standards laid down by Food Safety and Standards Authority of India (FSSAI). The Food Safety and Standards (Licensing And Registration of Food Businesses) Regulations, 2011 lays down the following responsibilities which needs to be adhered by the FBOs:
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FBOs need to ensure that the article of food satisfies the safety requirements provided under the Act at all stages of production, processing, import, distribution, and sale within the business.
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FBOs must prohibit from manufacturing, storing, selling or distributing any food article which is unsafe, misbranded, sub-standard or prohibited by the Food Authority or Central Government or State Government in the interest of public health.
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FBOs are required to prohibit from employing any person who is suffering from infectious, contagious, or loathsome disease.
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FBOs also need to ensure that all conditions of license as provided in Annexure II of Form B and the safety, sanitary and hygienic requirements provided under Schedule IV of the Regulation are complied with at all times.
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All FBOs need to obtain license and register their premise for operating as a Food Business Operator of Food Manufacturing Company.
Consumer Right to be Informed and FBOs/ FMCG entity responsibility to ensure that the products sold or manufactured by them have relevant information required for such rights to be exercise by the consumer
Consumers have the right to be informed of details such as quantity, quality, standard, purity, price of the goods or service purchased by them. In order to ensure that such rights are provided to the Consumer in a transparent manner a FBO/ FMCG entity, is required to adhere to the compliance requirements laid down under Food Safety and Standards (Labelling and Display) Regulations, 2020. The Regulation mentioned above, requires FBOs to decare list of ingredients, veg or non-veg logo, name and complete address of brand owners, FSSAI logo and license number of food packages. Additionally, FBOs are also required to declare Nutritional Information on specific food packages, which provide complete details on energy value, protein, carbohydrate, fats, sodium and other nutritional information present in the food product. Such compliance requirement cast an obligation upon the FBOs however it assists consumers in making informed choices. The mandatory requirement of putting Vegan Logo on the labels of Vegan food as per Food Safety and Standards (Vegan Foods) Regulations, 2022 and logo on Ayurveda Aahara products as per Food Safety and Standards (Ayurveda Aahara) Regulations, 2022 are also some of the initiatives introduced by the Authority to help consumer make informed decisions.
Consumer Right to Choose and FBOs / FMCG entity responsibility to ensure such rights are exercise by the consumers by prohibiting Unfair Trade Practices
Consumers have the right to be able to select from a wide range of products at a reasonable price. The right to choose signifies that the consumer must have the right to access a diverse range of products and services at a reasonable rate.
Food Business Operators and also other Fast Moving Consumer Goods Industries need to adhere to the compliance requirement laid down under the Competition Act, 2002. This Act ensure implementation of consumer rights by prohibiting unfair trade practices, anti-competitive agreements, and abuse of dominant position within the Industry in India.
Consumer Right to be Heard as well as Seek Redressal and FBOs / FMCG entity responsibility to ensure implementation of decisions made by the Appropriate Forum
Consumers have the right to file complaints in case of unfair trade practice conducted by the seller and seek redressal. The right to be heard assures that the consumer’s interests will be heard and considered at the appropriate forum. If the consumer is not satisfied with a particular product, they have the right to get such product replaced, compensate, and get a return of the amount paid for the product. The Consumer Protection Act, 2019 provides for a three-tier system of redressal, namely-
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District Consumer Dispute Redressal Forum- It has the jurisdiction to entertain complaints where the value of the goods or services paid as consideration does not exceed one crore rupees,
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State Consumer Dispute Redressal Forum- It has the jurisdiction to entertain complaints where the value of the goods or services paid as consideration, exceeds rupees one crore, but does not exceed rupees ten crore, and
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National Consumer Dispute Redressal Forum- It has the jurisdiction to entertain complaints where the value of the goods or services paid as consideration exceeds rupees ten crore.
Time and again, Consumers have been given the opportunity to be heard and provided with resolution.
From FBOs perspective one such famous case is that of Arkadeep Sarkar versus Yauatcha, Kolkata in which consumer grievance was not only heard but also addressed. The Kolkata District Consumer Disputes Redressal Forum ruled that restaurants cannot force consumers to pay service charge. It is the discretion of the consumer if they are willing to pay for such charge. Many such similar cases have been filed in various forums of India. The Delhi High Court also asked the National Restaurant Association of India and Federation of Hotels and Restaurant Associations to consider changing the terminology of “service charge” to “ staff welfare charge” or some other alternative, so that consumers are not misled.
Consumer Right to be Aware and Educated on its Rights and FBOs/ FMCG entity responsibility to disclose relevant information of the products for its consumers
Consumer have the right to be aware of such rights so that they can protect themselves from being exploited. The initiative of Department of Consumer Affairs (DCA) to conduct multimedia awareness campaign titled “Jago Grahak Jago” which helps consumers to learn about fraudulent practices or problems and the manner in which such problems can be tackled is one such program to make consumers aware of their rights.
The Consumer Protection (E-Commerce) Rules, 2020 requires e-commerce entities to adopt fair trade practice and establish a Grievance Redressal Mechanism for assisting consumers with quick resolution. It also requires e-commerce entities to provide for relevant information about the product, such as expiry date, total charges, details on the country of origin (if applicable), etc. Such regulation ensures that the Consumer are well aware of the product / service they are opting for.
Consumer Rights and Organization’s responsibility to assist consumers in implementing such rights goes hand-in-hand. FMCG entities / FBOs must ensure adherence to the compliances mentioned above and also ensure that the Consumers are not misled by the product manufactured or sold by them. If such entities fail to comply with the compliance requirement provided under various regulations, not only the Consumer is aggrieved but also the entity might end up paying higher monetary penalties. Well, adhering to the compliance requirement have always been the top priority of FMCG /FBO Industries but large FMCG Organization may find it cumbersome to check the health status of compliances followed across all the operating units in different locations. To ease it out for such entities, Komrisk, the compliance management tool has played a significant role. With Komrisk, checking on the compliance health status across all locations and all operating units is a matter of few clicks. On a lighter note, the next time you as a FBO/ FMCG entity want to ensure whether each unit have adhered to the compliances and then packed those products, switch to Komrisk.
At Lexplosion, we have been working with a lot of FMCG companies, helping them in understanding and landscaping the compliance requirement under various Rules and Regulations laid down by Food Safety and Standards Authority of India, Department of Consumer Affairs, and other Authorities. Komrisk, Lexplosion’s compliance management tool helps such companies manage, monitor, and mitigate their legal risks. To know how we can help your organization, connect with us now.
Written by: Amanya Shree Gangawat
Co-authored by: Aditya Saraswat
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