CAA awaiting AG’s advice on BOI clauses within flour companies’ agreements

Saturday, 30 April 2011 00:05 - - {{hitsCtrl.values.hits}}

By Shezna Shums

The Consumer Affairs Authority (CAA) has written to the Attorney General’s Department seeking its advice regarding certain clauses in the agreement signed between the companies and the Board of Investment.

CAA Chairman Rumy Marzook said that Prima Flour Company and Serendib Flour Mills (Pvt) Ltd. had signed agreements with the BOI and that there were some clauses which the CAA had to seek the AG advice on.

When the AG’s department replies us, we will take preliminary objections,” he said.

The CAA is delaying taking legal action against the flour companies till the relevant clauses in the agreements signed between the companies and the BOI are clarified.

CAA, Chairman, Rumy Marzook told the Daily FT that they were awaiting the AG’s response, after which the Authority would file action in court.

Both Prima Company Ltd. and Serendib Flour Mills (Pvt) Ltd. revised the price of wheat flour. Prima increased a Kilo of wheat flour by Rs 4.10 while Serendib Flour Mills raised it by Rs. 4.10.

Both companies did not seek the approval of the CAA prior to this price revision. Serendib Flour Mills (Pvt) Ltd., CEO, Sathak Abdul Kadar told Daily FT that they were yet to have discussions with the relevant officials regarding the revised price of flour.

Following the price hike on flour, a loaf of bread costs the consumer Rs. 2 more.

The agreement signed by the flour companies and the BOI indicate that both Prima Company Ltd. and Serendib Flour Mills (Pvt) Ltd. could revise the price of flour at their discretion.

Meanwhile President, All Ceylon Bakery Owners’ Association, N.K. Jayawardena said, there was no difference in the number of loafs sold despite the increase in the price of bread.

Traders raided

CAA Chairman Rumy Mazook said that since early last week the CAA had conducted over 1000 raids on shops and traders who were selling rice over the government’s ceiling price.

Raids also included shops and traders who were selling food and soft drinks that had passed their expiry dates.

In around 30 raids conducted over 150 traders were fined for not displaying the prices of goods they had for sale.

The CAA had issued a gazette notification that all advertisements relating to goods and services should include the price of all such items when advertised in all types of media, such as print, electronic, radio and internet as well as when the shops display a list of goods that are for sale.