LIVE NEWS

To counter the galloping inflation of consumer products, the government is considering creating a new marketing mechanism. The initiative aims to introduce direct competition with supermarkets, which are accused of taking advantage of rising freight costs to justify price increases. Le Défi Quotidien is in the presence of information according to which the State Trading Corporation will be involved.

It is a fact that soaring prices are exasperating the population. “It is unacceptable that households are penalized in this way by dubious commercial practices. The government will act,” says an informant very close to the case. The State Trading Corporation (STC) will thus be called upon to broaden its scope of action to include other everyday consumer products. The stated objective is clear: it is imperative to offer consumers an alternative to large retail chains, accused of agreeing on prices to the detriment of citizens' purchasing power. “By intervening directly on the market, we want to force supermarkets to review their practices and offer fairer prices to consumers,” it is understood.

Smatch

It was the importation of Smatch brand consumer products (Editor's note: powdered milk, edible oil, dry grains and basmati rice), around mid-2022, that prompted the government to start importing other foods. Moreover, the objective behind the importation of Smatch brand products was to encourage supermarket managers to practice a reasonable margin on these four basic consumer products. “The objective has been achieved,” it is emphasized. The amount of Smatch oil, which was subsidized by the government, was Rs 75 per liter and the 5 kg bag of Basmati rice was sold at Rs 332.

How will this work in practice? Does the government plan to set up outlets in strategic areas of the country, to ensure fair access for all? “Everything is still in its infancy at the moment. But this new mechanism will offer a wide range of essential products at competitive prices, thus reducing the pressure on households. The important thing is to promote healthier competition by offering consumers more affordable options,” our source points out.

Retail executives, for their part, refute the accusations of abuse and point to the reality of international logistics costs. Ignace Lam, director of Intermart supermarkets, believes that “we must let free competition play out.” “I wish the government good luck. But experience shows that state intervention has never worked. It is not the role of the state to compete with supermarkets,” he says. Ignace Lam, however, is rebelling on the subject of freight. “Freight is a global problem. If the government can charter at a lower cost, so much the better,” he insists.

Cover the costs

Nooreza Fauzee, Director of Dream Price Supermarkets, also defends herself by stressing that “we are also impacted by the increase in freight costs and we are doing our best to limit the impact on consumers.” She considers the idea of ​​the government marketing consumer products to be positive. “Let's hope that a mechanism that is efficient enough will be introduced to supply all the outlets across the country,” she says.

Nooreza Fauzee acknowledges that the increase in freight costs is also affecting her business. “We sell our products at a price that can cover the costs. It’s not that we sell at a high price, but we have to cover the costs,” she says.

STC's Rajiv Servansing: 'We will adjust according to government policy'

“After COVID-19, STC started importing four products: milk, oil, dry grains and basmati rice. Subsequently, the prices of milk powder and oil plummeted. The prices of dry grains and basmati rice have stabilised. If there is a government policy in this regard, we will adjust accordingly,” says Rajiv Servansing, Director, STC. According to Rajiv Servansing, STC’s intervention in the market has helped curb price volatility of some everyday commodities, thereby providing some relief to consumers.

Finance Minister: “Calm unreasonable desires”

“We will carry out price checks on products. Let it be clear, the Minister of Commerce and the Prime Minister have also said it, we will be very strict with operators in the large-scale distribution sector if they increase their prices. We will closely monitor what is going to happen to prevent an artificial increase in prices,” made it clear to the Minister of Finance, Renganaden Padayachy during the Budget Breakfast, on Saturday, June 8. The Budget annex clearly mentions that the law will be strengthened to dissuade bad practices. Renganaden Padayachy gave the guarantee that the authorities will ensure that the additional income that will enter the pockets of Mauritians “is not eaten up in one go”. “We have the necessary tools such as the 'mark-up' that we can put in place to calm unreasonable desires,” he warned.

Leave a reply below

Your email address will not be published. Required fields are marked *

×

Contact Business

Captcha Code