MYTH OF RO WATER FILTERS EXPLODED

Yesterday when I had been to a exhibition I was shocked by the price quoted by a brand of water RO filter manufactured in India. He quoted a net price of 4250 and in case I bought in quantities the price would go down further. Assuming that the bargain price at quantity will be Rs 4000/- per unit including excise duty of 10%. The other elements of RO costing will be as follows :

Basic RO unit cost ; Rs 4000/-

2% CST : Rs 80/-

12.5 VAT : Rs 525/-

Transport : Rs 50/-

Distributor Margin : Rs 600

Fitting charges : Rs 100/-

TOTAL COST Rs 5355/-

The current market price of Kent or Acquaguard is around Rs 15500/- which is fleecing the customer to the extent of 200%. These branded products are offering 1500 to retailer and 500 margin to the distributor. Even then a price of 13500/- is almost 200% higher. After lobbying for a price cut in excise duty from 16% to 10% the companies have infact raised the price from 14000 to 15500/- which is shocking.

Majority of the inputs such as carbon filters, candles, Uv Filters and motors fitted in the RO water filters are imported. The manufacturers who produces a high volume has cost advantage obviously. He can cut cost rapidly.

Considering that water filter is an essential mass product the state governments too will consider to reduce the VAT element, which if represented properly can come down to 4% and excise too at 4% which will enable the costing of the manufacturers to bring down MRP to under Rs 5000/- per unit for 10 litre capacity to a consumer.

Further with regard to servicing the candle costing will be around Rs 100/- per candle for either carbon or sedimentary candle whereas the companies are charging exorbitantly at Rs 250 and above. Every year the candles have to be changed the companies are authorizing the dealers to charge an exhorbitant fee of Rs 250/- The companies should rethink their strategy on this account. A fee of Rs 150/- on candles and Rs 100/- on fitting should be maximum chargeable. An yearly expense of Rs 250/- is affordable and reasonable considering the mass consumption of the product. I hope KENT & ACQUAGUARD rework their strategies considering other brands will be compelled to sell their products at below Rs 6000/- MRP per unit to enter market. The price difference for a branded and unbranded product should not be more than 20%, which literally means below Rs 7500/-

Considering the above ground realities can we MSians do something to follow up with the companies who are profiteering beyond imagination on such an essential product. It is literal exploitation. May be an RTI or white paper on costing and margins by the companies themselves. It should result in refunds or lifelong ( 15 years ) servicing of products already bought by the customers by paying a high price.