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Ever wondered why the MRP rate printed on the shiny box of fireworks is somewhere over the roof but the trader is ready to give it away at throwaway prices? The MRP may show even Rs 5,000 but you can still get it at half the listed price or even cheaper. In short, that MRP rate is not meant for you.
Sivakasi town in Virudhunagar district of Tamil Nadu with its 700 odd fireworks manufacturing units controls nearly 75% to 80% of the fireworks production. The industry dating back to the 1940s is a sister industry to the matches industry in Virudhuagar district. The pioneers of the matches industry started manufacturing fireworks in Sivakasi after learning the trade in Calcutta.
The arid climate with dry air, vast tracts barren land available to set up manufacturing units, and abundant manpower from the surrounding villages made the industry click and thrive in Sivakasi. From simple sparklers, flowerpots to crackers, Sivakasi has evolved into a fireworks hub that can create the most complex pyrotechnics in a period. Pyro fireworks are the ones that go up and burst in a variety of colours.
The arid climate with dry air, vast tracts barren land available to set up manufacturing units, and abundant manpower from the surrounding villages made the industry click and thrive in Sivakasi.
Situated down south, Sivakasi ships truckloads of fireworks across the country before Deepavali and the MRP printed on the boxes is something tricky that came into being based on the demand of dealers. “We don’t manufacture packing boxes for different regions or states. They are all made uniform and the MRP you see on the box is meant for the North Indian market”, said a manufacturer in Sivakasi.
The MRP component includes raw material, labour, transportation, different taxes and dealer margin. Apart from raw materials and labour at manufacturing units, the transportation and taxes like octroi vary depending on the distance the manufactured fireworks are shipped. For an instance, states like Rajasthan, Uttar Pradesh and Uttarakhand are really far from Sivakasi but the markets there are big. The fireworks market in Delhi alone accounts for 15% to 20% and the deteriorating air quality in Delhi and subsequent ban on fireworks sting the manufacturers really hard. “The air pollution in the North during the Deepavali season has cost us 40% production loss,” said T Kannan, a fireworks manufacturer in Sivakasi.
There is also a component of dealers’ margin that comes into play. The manufactured fireworks are shipped to main dealers in these states. The smaller dealers procure fireworks from main dealers and the cycle goes on till local traders in small towns. The MRP spikes when the dealer’s margin is included. Local traders in Tamil Nadu or neighbouring states are able to sell cheap as they are closer to the hub. “The MRP printed is for the overall country. We get the fireworks cheaper from Sivakasi and provide fireworks at greater discounts,” said A Venkatesh who set up a temporary fireworks shop in Madurai this Deepavali.
The discount varies based on the brand as well as product. Ordinary fireworks like sprinklers and crackers can be given at throw-away prices but the pyro technique fireworks will cost more. Reputed brands would be costly as well, Venkatesh stated.
The discount varies based on the brand as well as product. Ordinary fireworks like sprinklers and crackers can be given at throw-away prices but the pyro technique fireworks will cost more.
The manufacturers say that the traders in North India also offer a discount on fireworks. “It is a seasonal business and the sale is limited only for occasions like Deepavali. Discount is something that lures customers to fireworks. So the dealers always want the highest MRP to be printed on the boxes,” said the fireworks manufacturer.
The demand also fluctuates based on the days early or after the festival. The prices tend to crash a few hours before Deepavali day when the entire shopping spree comes to an end. The dealers who could not make most of it would pack the leftover fireworks and store them for another occasion like Karthigai deepam or Christmas but the market for these festivals is quite small.
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