PRICE CHECK

June 29, 2013 - 2:06:19 am

The price freeze imposed by the Ministry of Business and Trade on a number of food and non-food items during Ramadan is aimed at benefiting the consumer, but it comes as a boon for many small outlets as they stock up on these items at discounted rates so they can sell them at higher prices after the holy month.

People say instead of mounting vigil on bigger shopping outlets like malls and hypermarkets during the fasting month to check their compliance with the “fair price” directives of the ministry, government inspectors should focus their attention on the mushrooming neighbourhood stores that allegedly indulge in “hoarding”.

It is believed by many that it is a common practice with most grocery stores to procure Ramadan fair price items, both food and non-food, from larger outlets in large quantities and stock up on them.

Sources say that the modus operandi adopted by these stores is to send their men to bigger outlets and buy items in relatively larger quantities on almost daily basis until the Ramadan price freeze is in effect.

“The price difference is usually 10 percent, which is a good margin. Add to that 10 to 15 percent, which smaller stores keep as margin on almost every item they sell. That means they make no less than 20 to 25 percent profit on these items,” said a market source.

Last Ramadan, a representative of a major shopping complex had told this newspaper that he saw a grocery store operator buy relatively large stocks of items like rice and wheat flour, among other things, from his outlet but he could do little to stop him. 

He said he knew that the man was from a grocery store and that he was not the end-user but rather a retailer but he added that he was helpless since he had no authority to stop him.

Sources say the Consumer Protection Department (CPD), the consumer rights watchdog under the trade ministry, should pay attention and think of some way to stop smaller stores from doing such manipulation.

The price freeze this time becomes effective from July 1 and is to remain in force until the end of Ramadan in the second week of August.

“The 40-odd days are more than enough for small store operators to stock up on the supplies of fair price items for profiteering,” said a source.

The Ramadan price freeze is aimed at preventing retailers from raising the rates of essentials as their demand goes up considerably during the fasting month.

Smaller stores, however, take undue advantage of the price freeze as there is no regulation to stop them from stocking up on these items for future profiteering.

The CPD conducts extensive studies every Ramadan and singles out items that are fast selling during the holy month and based on that draws up its fair price list.

When the price freeze was first imposed several years ago, it involved 100 items. This year the number has reached 320, more than last year’s 275 items.

 
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