News
Fixed prices on essential items put traders and consumers in a fix
View(s):By Chrishanthi Christopher
Following the government announcement last week, of a fixed maximum price on 16 essential food items, many businesses have refused to slash prices saying that the government had not held discussions with them before fixing the price.
Wholesalers at Pettah market continued to sell the marked products at the pre- gazette prices maintaining that selling the stocked items at ‘fixed’ prices would make a dent in their profits.
What changed, what's not: A woman checks out a price list put up in front of a boutique. Pic by Indika Handuwala
The Consumer Affairs Authority (CAA) which was geared to check on errant traders when the gazette notification was out last Saturday (July16), went on an all-out checking spree countrywide, on retail and wholesale outlets that sold goods above the marked prices.
Director General, A.K.D.D.D. Arandara said that 200 investigation officers were sent out to the 25 districts in the country checking on traders who were defying the law. Up to Friday, 506 errant traders were nabbed and charged. They included 46 traders in Colombo, 34 in Vavuniya, 32 in Batticaloa, 30 in Anuradhapura and Kegalle, 29 in Kandy, 28 in Nuwara-Eliya and 9 in Jaffna.
Pettah Traders’ Association president K. Palaniandy said traders were defying the government ruling as they did not want to suffer losses. He said some were openly selling the items at pre-gazette prices and even hoarding items to create a temporary shortage of goods.
Refusal to sell the goods at the marked prices has also resulted in retail shops running short of the items. A grocery owner in Dehiwala said he could not afford to buy at the prevailing prices in the Pettah market. “There is no profit when we have to sell at a fixed prices,” he said.
Sugar suffered the most with the price drastically marked down to Rs.95 from the pre-gazette price of Rs.117 a kilo. Some Super markets used the situation to boost their sales by rationing sugar and selling it only to those customers whose bill came to Rs 1000 and above.
Those whose bills came to Rs.1000 were able to buy a kilo and those whose bill was over Rs. 5000 were able to get 3 kilos of sugar. Mr. Palaniandy said this trend would continue until traders got rid of their stocks. “It will take a month or two,” he said.
However, he said, wholesale traders played it safe and it was difficult to catch them in the act. “Goods are sold without issuing bills. Even if they issue bills it is not legible and the government cannot charge them,” he said.
Additionally, he charged that CAA officers were taking bribes and letting errant traders slip away from the net.
Essential Food Commodities Importers Association, President, Nihal Seneviraatne said that the wholesalers were not affected badly by the price marking.
“It is the retailers who are affected. The wholesale price of sugar was Rs.90 even before the fixed price was enforced. Now it is fixed at Rs.95. Retailers with considerable stock at hand find it difficult to absorb the loss. We hope to discuss this matter with the government and get a refund on the stocks,” he said.
Commenting on the price of chick peas he said there was an ambiguity in the price-marking and all the varieties could not be sold at the fixed price. “There are three kinds of chick peas and the prices range according to size,” he said.
A spokesman for David Trading Co. in Pettah said that although the price of essential items have come down the market is slack. “We are now selling onions at Rs.65 and potatoes Rs.85 which is less than the government fixed prices. But retail traders are not buying these stocks, they are marking time in the expectation that the prices would go down even further,” a spokesman said.
A retail grocery shop owner in Welawatta said buying onions at Rs. 65 and selling at Rs.78 (the fixed price) was not profitable as there was only a Rs.13 profit margin. The trader explained that unlike wholesale traders they do not buy in bulk and considering the transport cost and waste suffered on perishable items it was not profitable.
Earlier the prices of onions, potatoes and other items were marked by the retailer who did it way above the actual cost.Meanwhile consumables items including sugar, chick peas, dried fish/sprats have disappeared from the shelves of many supermarkets and retail shops.
Tinned fish was found marked at various prices ranging from Rs.200 – Rs.240 or above. The traders said that canned fish has many brands and the government has not mentioned any brand names. “Only the Chinese tinned fish is going at Rs.140 but people don’t buy this as it is substandard quality,” one trader said.
A supermarket owner in Dehiwala said his outlet has stopped selling chicken as the price of Rs. 495 MRP on skinned chicken was not profitable. He said the poultry farmers have refused to sell chicken at this low rate and he had to close the chicken counter.
The CAA clarifying this point said the MRP price on chicken applied only to frozen chicken and not the price of fresh chicken.
Meanwhile the Ministry of Trade and Commerce said that it was making arrangements to import the the food items with the fixed price and distribute them through the 387 Lak Sathosa centres in the island.
Secretary, T.M.K.B Tennakone said the 250 co-operative whole sale establishment (CWE) and the numerous co-op city and mini co-op city of the co-operative societies in the country would also be involved in this move. “We want to create a competition and bring down the prices in the private sector,” he said.
Meanwhile the CAA is making arrangements to produce the 506 traders who were nabbed last week, in courts.
Mr. Arandara said allegations that CAA officers were taking bribes would be inquired into if brought to his attention. “I will take action against them, immediately,” he said.
Consumers have been asked to make complains on the 24- hour hotline – 1977.