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Monday, 5 June 2017 00:10 - - {{hitsCtrl.values.hits}}
Minister of Industry and Commerce Rishad Bathiudeen (centre) meets Colombo Traders Association (CTA) Secretary Sooriyar (third from right), CTA Chairman Y.M. Ibrahim (second from left) and CTA Vice Chairman S.M. Zaneer (second from right)
A powerful retail market supplier collective in Sri Lanka said that the prohibited market practice of mixing imported and domestically milled rice could be overcome through a simple move instead of resorting to punitive official raids.
Meeting the Minister of Industry and Commerce Rishad Bathiudeen on 1 June, the Colombo Traders Association (CTA) also said that the Maximum Retail Prices imposed by the Government have become an impediment, hampering Lankan consumer wellbeing rather than improving it.
The 1 June meeting, specially convened by Minister Bathiudeen to hear the grievances of the supply side of the retail sector, was attended by the CTA.
Ninety percent of its 210 members are large volume importers and distributors and committed taxpayers. Most of these members regularly pay taxes to the Inland Revenue Department, not within a mere million rupee range but at multibillion rupee levels.
The top CTA representatives at the 1 June meeting were the Chairman of CTA Y.M. Ibrahim (Chairman, Ishana Exports Ltd, a leading exporter of spice), CTA Deputy Chairman S.M. Zaneer (Chairman, KTC Group, the main importer of dates, raisins and sultanas to the Lankan market and also a leading rice miller) and CTA Secretary Sooriyar (Chairman of Sooriyan Traders, a large-scale importer of essential food items to Sri Lanka).
The meeting was also attended by Minister Bathiudeen’s top officials in charge of retail, across such institutions as the Consumer Affairs Authority, the CWE and Lanka Sathosa.
“How can we realistically fix an MRP on an imported product for a long time or even a short time?” asked CTA Deputy Chairman Zaneer, adding: “Prices change seasonally and the dollar rate also fluctuates. The MRPs therefore should be changed very often to give the best to our consumers. But how often do our MRPs change if at all?
“We at CTA support that there should be an MRP for rice varieties which is our staple food. More importantly, there is a large local industry of farmers and millers which should be safeguarded. Rice MRPs therefore prevent consumer exploitation. But should other essentials too be given MRPs? Only small amounts of other items are locally produced but large volumes are imported. Even for rice, we believe that there should not be a practice of different prices for imported and domestic rice. A main reason for illegal mixing of rice is this arbitrary price structure. We propose equal prices for both imported and domestically milled rice in the local market. This can be done through a simple move - by increasing the duty on imported rice by as little as Rs. 10 and no more.
“Raids are needed to prevent abuse but the present system of raiding is harsh and they show no mercy. Once my raided stocks were taken and destroyed even though all criteria were fulfilled and the labels were in order. Then the wrong party was accused once – one of my product packs purchased by a seller that was unsold and kept in a corner in seller’s shop then later expired, was detected and instead of the seller, I, the original manufacturer, was accused since the label shows me as the manufacturer.”
CTA Chairman Ibrahim explained how MRPs often do not result in the best price as intended.
“The MRPs are imposed to safeguard the consumers, which we believe to be important. However, some members in our association do not see any benefit in maintaining the same MRP on certain products (other than rice) over a longer time. Our MRPs are not changing in line with the global market rates, in that the MRPs are effective in the market at times of shortages, maintaining the price of the essential item without increasing it further. But unfortunately, often our MRPs continue to be enforced long after the international market price of the same commodity has fallen even below the local MRP. As a result we find local consumers continue to pay higher prices for the item when the actual price of the commodity should be much lower,” he stated.
“Also, when the international market price of the commodity is higher than local market MRP then the importer is not able to import since the importer is bound to sell at the lower MRP, incurring losses since they are compelled to sell at a lower MRP than the international price. Therefore we are compelled not to import at such times, which creates shortages in the market, hampering the consumer’s wellbeing and leading to us also losing business in the meantime. The way to overcome this is by opening more towards global and dollar rates for essential items other than rice, and for rice, allowing a uniform price for both imported and locally-milled rice. We propose a single, flat price tag for both locally-milled and imported rice of the same varieties by bringing in a simple import duty.”
Minister Bathiudeen responded: “I thank the CTA for bringing these issues to my attention. Since MRPs and raids on errant traders are to safeguard consumers and directed by the Cost of Living Committee, CAA and higher levels of the Government, I on my own will not change its implementation. MRPs also need to be studied more and watched closer. We are here to safeguard consumers and we focus on the market/demand side. Today for the first time we heard the supply side’s situation from the CTA and these issues too need to be studied. I instruct you to make these representations and recommendations in writing immediately to me so that I will present it to higher levels to decide the way forward on giving the best price and quality on all essential items.”
Chicken meat, red dhal or lentils, sprats, chickpeas, green gram, canned fish, white sugar, white flour, full cream milk powder, potatoes, Sustagen, onions, dried chillies, dried fish and Maldive fish are among the items gazetted by the Government as ‘Essential’.
