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Proper price checks needed

Verenaisi Raicola
Wednesday, August 01, 2007

Early last month interim Finance Minister Mahendra Chaudhry wrote to stakeholders and government ministries regulating food prices about a sudden increase in prices.

Around the same time people began openly complaining about price rises for some of the food items and other products, saying some prices had jumped by up to a dollar.

The Ministry of Finance saw the need for a joint effort by the Consumer Council of Fiji, Prices and Incomes Board, Department of Fair Trading and the Customs Authority to work to establish the reasons behind the:

Sudden escalation in the prices of locally manufactured and imported food items and household items;

increase in inferior quality of goods dumped in Fiji including food, household items, footwear, toys and fancy goods; and

underweight goods.

Supermarkets argue that consumers have to pay for the extra costs incurred in manufacturing and packaging imposed by the rising costs incurred by doing business and providing services.

The trickle down effect of increase in importation, production, distribution and retail costs is pushed on to consumers.

In conjunction with that is the increase in fuel price and the recent drought in Australia that has had an impact on the increasing cost on imported foodstuff.

The Consumer Council voiced concern after a survey found the prices of items that should have been reduced as stipulated by the revised budget of 2007 had not.

The council said there were unbalanced practices surrounding our imports and exports.

It said local authorities were not properly scrutinising imports in the same manner in which Fiji exports were being checked in the countries they were consigned to.

The uncontrolled imports led to shops selling unknown brands of electrical appliances that carried instructions in foreign languages and which did not carry warranties and guarantees.

Low income earners were buying the products, not knowing that the cost of repairs was higher than the price of the product.

World Trade Organisation agreements recognise that countries have the sovereign right to protect the health and safety of their people and their biodiversity and that was why Fiji needed to monitor the situation much more closely.

A supermarket survey showed there was no change in the price of goat meat, cereals, soft drinks, yogurt, potato chips and cheese, even though they should have fallen.

A council check in key supermarkets in Labasa, Lautoka and Suva found a sharp fluctuation in the price of 27 essential goods.

In Labasa, a basket of goods cost $100.03 while the same basket cost $96.95 in Lautoka and in Suva $92.83.

Today, some examples of increases in prices show that a 500g pack of milk powder that cost $3.43 around the same time last year now costs $5.27, a 750-millilitre bottle of cooking oil that cost $1.59, is now $2.25. A 250gram pack of butter butter that cost $1.26, now costs $1.69, 2kg potato that cost $1.52 but now costs $2.16, a 100g Colgate that cost $1.39 now costs $1.82 and even a 1kg dhal that cost 85 cents now sells at $1.34.

For someone who used to spend around $91.02 for groceries, they will now have to spend $107.59, an increase of $16.57, to buy the same amount of goods.

The council says the interim regime should consider revising food items on the VAT exemption and price regulation list, which was not only archaic but failed to reflect the basic food needs of the people. It is a concern that food prices which do not fall under the PIB regulation list are not monitored and that traders can take advantage of the absence of proper price monitoring systems and charge what they desire.

To counter the increasing costs, the Prices and Incomes Board last Friday issued a 14-days intention notice to reduce the maximum percentage mark up for import, wholesale and retail of price control items.

This means that the ball is now in the traders' court to prove why they are charging more on items.

Council chief executive Premila Kumar says the increase in the price of goods could be attributed to the increased inflation rate from 1.9 per cent to 4.5 per cent and to a great extent to fuel prices increases.

She said the PIB, which had the right to information, should be gauging the profit made by businesses.

This means that if a trader made 20 per cent profit on powdered milk, the PIB could reduce it to 10 per cent.

Mrs Kumar said the increase in costs of some food items like dhal that had increased by 21.5 per cent was not justified even though powdered milk, which had increased by 53.7 per cent was because of a rise in the world price.

The following goods are under price control by PIB: Powdered, liquid, evaporated or condensed milk, including baby formulas, imported and local butter, frozen chicken, corned beef, mutton, all edible oils, canned fish, garlic, ghee, all types of margarine, cabin and breakfast cracker biscuits, Bushells and Punjas tea, infant food preparations, onions potatoes, rice, salt, sheep meat, sugar, bread, flour, sharps, instant noodles, dried leguminous vegetables dhal and peas. The non food items includes stationery and related commodities, text books used by educational institutes, plywood of all types, medicine ethical and patent, fertilisers, motor vehicle parts and accessories, tyres and tubes, storage batteries, kerosene, motor spirit gas oil (diesoline), premixed outboard fuel, white benzene, claddings and boards of all types.

Any trader who exposes or displays for sale by retail any price control item is required to:

sell at or within the maximum price declared by the Board;

mark clearly on each price control items the retail price of the item and;

display the prices of items that cannot be marked such as bread, potatoes, garlic, onions, kerosene and white benzene at a prominent place for public information.

The fixed retail prices of the items are published in Price Control Orders are available free of charge from any PIB office.

Queries on retail prices should be directed to PIB: In Suva: Level 1, HFC Centre, 371 Victoria Parade, telephone: 3309266; Lautoka: First Floor Downtown Holdings Building, 155 Vitogo Parade, telephone 6661853; Labasa Corner of Nanuku/Jaduram streets, telephone 8811155.

Stakeholders meet tomorrow to present feed-back to the Finance Ministry on how best to address the increasing cost of food items.

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