Price gouging, a double whammy for consumers – the Island


By Claude Gunasekera

The widespread drop in prices of almost all commodities in the country has created a double whammy for the citizens of Sri Lanka despite their struggles with the Covid-19 pandemic. Raising prices is illegal during a state of emergency in consumer protection laws. Some countries, even without laws, issue executive orders prohibiting action in an emergency or pandemic.

Consumer prices have increased at a faster rate than ever. With the exception of very few locally produced food and household items and some pharmaceuticals, all other prices have increased. Despite import restrictions, all items allowed to import are at unaffordable prices, including locally made products with imported raw materials. Even 100% local products have increased their prices due to the rising prices of oil, gas and other production overheads added to them by keeping extra margins on the rising cost of living. .

“30% of the fast moving consumer goods (FMCG) in a retail store are complete direct imported products and 35% of local products depend on imported raw materials and the remaining 35% are considered only complete local products. The price crisis mainly concerns the first and second categories, made up of the most demanding essential goods, which represent 65% of consumers’ daily needs. Meanwhile, prices are increased for at least 20 percent of local products in the full category of local products. It is estimated that around 85% of consumer goods see their price increase, ”said Charitha Subasinghe, president of retail at John Keells Holdings PLC, head of Keells Super Retail Chain. He said inflation is the biggest challenge globally and Sri Lanka has its own currency issues and import restrictions, creating soaring prices and product shortages.

Glenfrey De Mel, President of Star Media Network, a Colombo Law School graduate and human rights activist, asserted that “it is a democratic right of the masses to have purchasing power over people. basic necessities while human life and the price of basic necessities are closely linked. When the prices of basic necessities become incompatible with the financial well-being of the population, the agony of poor and disadvantaged families is endless ”.

“The current government has failed to make the right decisions, at the right time, to control the existing price hikes. The government has failed to implement appropriate policies to balance the economy and control the cost of living of the masses. A few large traders dominate all commodity imports and control the entire domestic market with unethical influence from the government. The government supports them for political gain without even considering the majority of their voters who elected them. Therefore, the government is solely responsible for this serious blunder, ”said Dinusha Sampath Liyanage, president / CEO of Sampath Group of Companies, the holding entity of the“ Sampath Food City ”supermarket chain. He said ‘The Island’ that the elected government of the people is responsible for meeting the necessary needs of the citizen, in particular essential food and services at an affordable price and for creating a balance between income and purchasing power while maintaining an acceptable rate of inflation .

Liyanage added ‘The Island’ that instead of making allegations to the government or the big trader, as an entrepreneur engaged in the retail trade, he could offer the maximum possible discounts at the 20 outlets of the supermarket chain “Sampath Food City ‘At this crucial stage as a concession to all walk in customers. He said that profits are necessary for the survival of a business, but profitability is not the main focus at the moment as he realizes the anguish of the innocent consumer. The Sampath supermarket chain is the main retail network in Kalutara district with a large customer base of over 250,000 customers visiting their outlets. He said that some of the fruits and vegetables sold in his supermarkets come directly from his own farms, and since there are no intermediate trading margins, they could pass this price advantage on to the customer under the theme “Direct from the farm. in the hands of the consumer “. “We are unique from other retail chains as we offer discounts on all products available in-house. We offer 25% off on fruits and vegetables and many other special discounts every now and then on major essentials such as rice, wheat flour, sugar, dhal, onion, potato , powdered milk, cookies, etc.

AB Wijesinghe, chairman of the ‘Lion Super’ retail chain, which operates 7 supermarkets on the outskirts of Kandy, told ‘The Island’: “We have a different customer segment than domestic supermarkets. Our main concern is the ordinary low and middle income neighborhood consumer, simply the “villagers” with a targeted fraternal relationship approach with personalized service. He said they looked after them with a great understanding of their purchasing power and offered the best possible prices even less than the neighboring retail store. He also said that the theory of the lowest price did not start during this time of crisis, but that the main objective of creating the original “Singhe” retail chain was to offer the lowest price. lower in the market. It continues to accomplish the same mission under the new brand of Lion Supermarkets.

“We operate 7 supermarkets in the outskirts of Kandy and have launched a ‘Double Discount’ offer in all of our outlets as a special concession to needy customers during this difficult time, offering additional discounts for many products thanks to the support of our Supply Chain. We were able to negotiate additional discounts from most vendors and offered the entire portion directly to our customers. We are able to make our customers very satisfied and appreciated with this concept of massive price drop, ”said Indika Sampath, Head of“ Lions Super ”operations.

In addition, all modern commercial retailers such as Lanka Sathosa, Cargills Food City, Keells Super, Laugfs Supermarkets, Arpico Super Centers, Glomark, Spar, Salinda Supermarkets, Hewage Supermarkets and many more have been found to offer great discounts. to their customers. Some may think of this as a business promotion, but in the end, customers will benefit from their offers, resulting in a concession at this crucial time.

“We serve a number of retail outlets around the country with a range of local consumer food products. We do not produce or distribute a single imported product, but the turnover fell 40% during the month of November. Products supplied in the previous months were still on retail shelves like never before. This clearly shows the inability of consumers to spend. We see that people only buy the most important items to survive the day. Most people have reduced their usual consumption due to the high cost of living. We are even struggling to keep our factories running and the question is how we could continue to run the business and pay our factory workers and it is time to lay off staff and cut our overheads, ”he said. said Jayantha Perera, president of “Jayz Kitchen,” a leading spicy food manufacturing company.


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