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Economies of scale lead to higher price of goods

Felix Chaudhary
Friday, May 19, 2017

FIJIAN Made goods are more expensive than imported products because of economies of scale, says Fiji Commerce Commission CEO Joel Abraham.

"There will be price disparity and the reason for that is simple — the amount of production we can do is limited," he said.

"There will come a time when we will be able to increase production to a level where the cost per unit will come down and the consumer will end up paying less at the supermarket."

Mr Abraham said purchasing Fijian Made products should be viewed as an investment into the country and the people involved in the manufacturing of locally made products.

He said people who could afford to, should not compare prices with cheaper overseas goods because the benefits of buying Fijian Made outweighed the extra cost people paid at supermarkets.

"People tend to look at the cost of Fijian Made goods.

"It is not just about buying products.

"When we look at goods and services that we buy, we are looking at it from a consumption purpose.

"But the Buying Fijian Made campaign is talking about a change in mind-set where we are making an investment into Fiji.

"And that investment goes back to our fellow brothers and sisters involved in the production and processing of the product.

"And that trickles down into the economy and that money gets recycled in the economy as opposed to paying for imported products where the money goes to the country the product originated from."

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