By Anuradha Gandhi and Rachita Thakur
Introduction
Have you ever wonder what the difference between a blue and a pink razor is? One, obviously, the colour and ‘The Price”. This price difference between the two types of one products is simply because the pink razors are marketing towards women. This is not about one product but the wide range of products that are intended for use by women often carry comparatively higher price tags on them. This is the theory of ‘pink tax’.
The pink tax or a gender based pricing is an upcharge or a markup on commodities, products or services which were traditionally marketed towards women and have only cosmetic differences as comparable to those for men.[1] In simple words, this can be understood as the extra tax women pay within their daily lives as they consumer products that re solely meant to be consumed by women. Certainly rooted from the widely accepted logic that women are generally willing to pay more for the same services, and hence why should the market not capatilise it?
The concept of Pink Tax
The concept of the Pink Tax has gained attention in the recent years, however, its roots can be traced back decades. The gender based pricing disparities have been in existence for long but they were not well documented until the term “pin tax” was recognized in the late 20th and early 21st centuries.
The consumer advocacy groups started highlighting the pricing differences in the year 2000 and confirmed that the goods and services marketed for women are priced higher than those for men. 2010 onwards media attention and public awareness led to calls for necessary changes in the policies, and the ongoing advocacy in the 2020s continues for the just and fair pricing practices and legislative action against it.[2]
The pink tax or a gender based pricing is an upcharge or a markup on commodities, products or services which were traditionally marketed towards women and have only cosmetic differences as comparable to those for men.[3]
Key Statistics and Insights:
Given the prevalence of pink tax and it’s the economic and societal impact, many countries have conducted research and released reports on gender based pricing disparity like California, Florida, and New York City. In 2010 the Consumer Reports highlighted the matter internationally and an analyses found that the women had paid 50% more than what men paid for the similar products.[4]
Later in 2015, the Department of Consumer Affairs, New York City reported that there were 794 products from 91 different brands which were priced differently for different genders. The research was conducted on different product industries such as personal care, health care that encompassed 35 categories of products like shampoos, soaps, lotions etc. In every industry the products made for women were priced more than that for men.[5]It was found from the research that the most pink tax was levied on the toiletries and personal care products.[6]
The study on Gender Pricing in New York City- “From Cradle to Cane: The Cost of Being a Female Consumer” highlighted the disparity from each industry:[7]
- Toys for Girls are priced 55 percent more than that for boys.
- Clothes for girls are priced 26 percent more than the pricing for the boy’s clothing.
- Clothing for women costs 40 percent more than the men’s clothing.
- Personal care products for women cost 56 percent more than that for men.
Meanwhile a study conducted in United Kingdom analyzed that the deodorant for women was 8.9% more expensive than that for the men. And a lotion for women was 34.28% priced more than that for a men.[8]
The world economic forum also reported that the pink tax is levied on the feminine hygiene products as such as tampons, sanitary napkins etc. Reportedly, the Countries including India and Scotland has completely exempted the tax on these products, where as Germany, Italy, Sri Lanka and Nepal has significantly reduced the tax on these commodities. This has come to an aid to the economically backward classes in all the countries listed above.[9]
Financial burden of Pink Tax:
- Even though women earn less than men, this additional markup on the goods marketed towards women imposes financial burden for women around the globe. Also, results in increasing the cost of living for women.
- The Global Gender Gap Report 2022 by the World Economic Forum[10] analyzed that, women are paid less than men for the similar nature of work and as the report mentions only five out of 146 countries have tried to fill the gender gap on these terms. This has significantly reduced the participation of women labor force as relative to men. It was also reported that the gender pay gap is one of the major factors contributing to the gender-based economic inequality and discrimination.
- Women spend more on essentials than men: from the above mentioned statistics it is reported that products and services designed for women are more expensive than that for men and as a consequence of which women tend to spend their income more on essentials- on an average 64% as compared to 53% of their male counterparts.[11]
Legal landscape by Countries:
There is no universal legal framework prohibiting the pink tax, but several jurisdictions have taken measure to address gender based pricing disparity.
- United States: In the US, pink tax officially dates back to 1994, this was supported by a report from California’s Assembly Office of Research which found out that 64% of stores in five major cities charged more to wash and dry clean a woman’s basic shirt than they did a man’s shirt or a basic t-shirt. Based on which California enacted the Gender Tax Repeal Act, (1995), which prohibits business from charging different prices for services based on gender.[12]
a. Gender tax repeal Act (United States):
was first introduced in 2015 by the Congresswoman Jackie Speier, the Act aims to prohibit the sale of substantially similar good and services at different prices for different genders.
b. California’s Gender based pricing law AB 1287:[13]
At a state level, California had proposed the AB 1287 “Eliminating the Pink Tax” bill-
AB 1287, the bill aims to prohibit businesses from charging different prices for similar products and services simply because of the gender the goods are marketed to. In order to charge different prices for similar product, a venture would have to prove that there are substantial differences in making and the cost of production. If a venture is charging more for the products specifically marketed to women, such a business shall be fined for the increased charge on each product or commodity sold by it. By eliminating the phenomenon of Pink Tax would eliminate one of the barriers to gender equality. Contributed by the gender pay gap, arbitrary price differences or disparity are unjust and harmful. The women without the fear of gender- based discrimination be able to exercise their buying power. - European Union: The European Union consumer protection laws discourage unfair pricing practices, but there is no explicit legislation banning the pink tax.
In 2019 the European Parliament has adopted a resolution on gender equality and taxation policies in the European Union. The resolution draws the attention towards the extensive legal stance on gender equality and legal obligations for the design and impact of European and national tax policies.[14]
Treaty for Functioning of the European Union (TFEU):This treaty acts a normative framework for the enactment and interpretation of the laws. Articles 2 and 3 of the treaty contains the provisions for non-discrimination on the basis of sex and the core value and objective of these Articles lies in equality between both men and women. Article 8 and 10 contains the clauses for European Union to consider gender equality and non-discrimination in the framing of the activities and the policies including laws on taxation.
The Charter of Fundamental Rights (CHFR)
Article 21 of the charter prohibits discrimination on the grounds of sex and Article 23 ensure the equality between men and women in all aspects including taxation.[15] - India: In India there is no law which is explicitly prohibiting the pink tax however there are various provisions which can be enforced to ensure gender equality:
a. Article 14 of the Constitution (Right to Equality) – this can be challenged as discriminatory under Article 14 in the courts.
b. Article 15 of the Indian Constitution: No discrimination on the basis of sex, caste, race, religion.
c. Consumer Protection Act, 2019- This prohibits unfair Tarde practice which exploits consumers. - United Kingdom: Consumer rights laws aim to prevent discriminatory pricing however the enforcement of the same remains inconsistent.[16]
The Courts are Reluctant to introduce Pink Tax:[17]
a. In Schulte v. Conopco, d/b/a Unilever, et al 2021[18] the plaintiff alleged that Unilever is engaged in gender based price discrimination which has violated the Missouri Merchandizing Practices Act (MMPA) by charging more for a women’s deodorant then for men. The ingredients were similar but were not identical and they had launched 15 feminine scents marketed for women and 5 masculine scents marketed for men. The Eastern District of Missouri dismissed the complaint, ruling that “Missouri law does not compel identical products to be sold at the same price” and that the plaintiff’s remedy “lies with legislation, not litigation.” The court also observed that the plaintiff mistook the grounds of “gender-based marketing for gender discrimination.” The Court stated that in order to state a claim the plaintiff would have to allege that the only difference between the products was the price and the intended target of the marketing.
b. In Lowe v. Walgreens Boots Alliance, Inc., et al. 2021[19] the Northern District of California dismissed another pink tax action, although on not similar grounds. The plaintiff alleged that the charges for the Walgreen’s hair regrowth treatment for women was almost two times higher than the product marketed for men. The plaintiff alleged that the hair re-growth treatment had the identical ingredients, and that the only differences lies in the dosing instructions and the charges for them.
The court dismissed the contentions by stating that the plaintiff’s claims were preempted because, under the Federal Food, Drug Cosmetic Act (“FDCA”), Walgreens’ generic product labels were required to exactly mirror the brand-name label. Thus, to the extent the plaintiff claimed that the products labels were deceptive, such claims were preempted.
Conclusion
The Pink Tax is not only unjust and unfair, but it is also a cherry on the cake as the earnings of women are also less because of the wage gap.
The pink tax remain a contentious issue in consumer law and gender equality debates. While market forces plays a role in price differentiation, legal interventions are necessary to ensure fair pricing. Strengthening consumer awareness, enforcing existing laws, and introducing explicit legal prohibitions against gender based pricing disparity can help bridge the gap and promote economic fairness.
The Executive Director of the UN Entity for Gender Equality and the Empowerment of Women (UN Women) Phumzile Mlambo-Ngcuka has called the countries from worldwide to take measure in order to curb the gender based price disparity as this will further ensure equal participation of women in the economy.[20]
Surbhi Gandotra , Associate Advocate at S.S. Rana & Co. has assisted in the research of this article.
[1]https://www.healthline.com/health/the-real-cost-of-pink-tax#The-pink-tax
[2] https://www.bankrate.com/personal-finance/pink-tax-how-women-pay-more/
[3] https://www.healthline.com/health/the-real-cost-of-pink-tax#The-pink-tax
[4]https://www.nyc.gov/assets/dca/downloads/pdf/partners/Study-of-Gender-Pricing-in-NYC.pdf
[5] ibid
[6]https://www.nyc.gov/assets/dca/downloads/pdf/partners/Study-of-Gender-Pricing-in-NYC.pdf
[7]www.nyc.gov/assets/dca/downloads/pdf/partners/Study-of-Gender-Pricing-in-NYC.pdf
[8]https://www.weforum.org/stories/2022/07/what-is-the-pink-tax-and-how-does-it-hinder-women/
[9]https://www.weforum.org/publications/global-gender-gap-report-2022/
[10]Ibid
[12]https://www.forbes.com/sites/lawrencelight/2022/02/12/theres-a-pink-tax-on-women/
[14]European Parliament: Resolution on gender equality and taxation policies in the EU, 2018/2095 (INI), 2018
[15]The EU Charter of Fundamental Rights.
[16]https://www.investopedia.com/pink-tax-5095458