Amway India has clarified that its product pricing is in line with industry standards. Responding to the ‘Express’ series ‘Scam Way’, a statement issued by Amway India Head Office, Noida read: “The indicative price of some Amway products quoted by the media is just the cost of ingredients and primary cost of packaging and do not include any administrative, personnel and training, distribution and logistics, marketing and sales expenditure or taxation.”
“This puts Amway at par with any leading FMCG major in India where the industry average for cost of goods sold varies between 25 to 40 percent depending upon the category, quality, type of goods manufactured and sold. Amway India does not make any super-normal or abnormal profits. Our contribution to the corporate taxes of the Union exchequer or sales tax to states is among the highest among FMCG companies in India,” it added. The company claimed that it operates as per the guidelines issued for Direct Selling companies by the Government of Kerala in 2011. “By saying so, the company is making a futile attempt to claim that their business is legal. We have registered cases against Amway for the violation of Prize Chits and Money Circulation (Banning) Act, 1978,” Crime Branch SP P A Valsan said.
“Government guidelines state that a direct seller do not have to purchase any product as a condition for enrolment. For Amway, it is mandatory that all distributors buy products for a specific amount each year. This is clearly against guidelines”, he added.
Wayanad District Crime Records Bureau (DCRB) DYSP K Damodaran said that no court has so far given a clean chit to Amway. “It is clearly a case of cheating. The company claims that cases should not be registered in Kerala as there are no cases in Karnataka or Tamil Nadu. This argument is not logical,” said Damodaran, the investigative officer involved in three cases registered against Amway in Wayanad.