First it was the Covid-induced lockdown, then came supply chain disruptions followed by rising sea freight costs. Then came the Russian-Ukrainian war, global energy price volatility, India’s export ban, and then dollar market volatility in quick succession. The list of causes goes on, giving enough reasons for the price increases of consumer goods. These were mostly global phenomena and therefore unavoidable. Then came domestic heating oil price hikes – twice in the nine months since November 2021. The latest record highs now look like the best excuse for retail prices to hit record highs.
Retailers are the last point in the supply chain that sets the price tags that directly impact consumers. Is there a limit to their profit margin? What percentage? Who fixes it? Retail chief Helal Uddin defended the retailers. He says a vendor is hard working and needs at least Tk 500 per day to feed his family of five. He has to earn the amount, says Helal, president of Bangladesh Dokan Malik Samity, finding no fault with the large price difference between the Karwan Bazar wholesale market and the Rampura kitchen market in the capital.
While sympathetic towards retailers or sellers, the entrepreneur is the least intrusive to consumers. How much should consumers – not all of whom have unlimited income – pay to help the seller feed his family? Extra tk3 on an egg? Tk30 more on a kg of patal?
Fuel oil price hikes have become the latest excuse to squeeze consumers further. Will the fuel price hike apply to a pedal rickshaw van transporting vegetables or eggs from Karwan Bazar or Tejgaon wholesale market to the kitchen market or grocery store in your lane ?
In fact, an emergency number, such as 999 or the only dedicated Covid hotline, should also be opened by the Consumer Rights Protection Directorate. Random raids by magistrates from different agencies alone will not suffice. Retailers revert to previous practice right after the raids and make up for the penalty by charging consumers even more. Regulators should take calls from deceived consumers and send emergency response teams to markets, if possible, deploy undercover inspectors to check retail prices. These efforts can help put market manipulators back on track.
Prices also skyrocketed a few years ago when there was no covid or war. The umbrella trade body FBCCI set up stalls in various key markets in the city and sent teams to check prices with the Ministry of Commerce. It worked. Similar initiatives were seen in the coordinated campaign against formalin, joined by the Dhaka Metropolitan Police.
These initiatives are absent today.
Trade bodies find new excuses and negotiate with the government to obtain reduced duties or higher prices, as we have seen in the case of edible oils.
Consumers are voiceless scapegoats and no one owes them an explanation of why prices are rising, or by how much or for how long.
Global fast-food chain McDonald’s, before raising the price of its cheeseburger in London by 20% in July, explained to its customers why it had to opt for this one, explaining that the price would increase for the first time in 14 years due to soaring prices. inflation.
The price of the cheeseburger would drop from 99 pence to 1.19 pounds.
“Just like you, our business, our franchisees who own and operate our restaurants, and our suppliers are all feeling the impact of rising inflation,” McDonald’s publicly announced.
This is how McDonald’s values its customers. A simple leaflet didn’t cost them, but it’s one of the things that has helped the Chicago-based American food chain build its image and 36,000 outlets in more than 100 countries.
The British Retail Consortium also explained why shops and supermarkets had to raise prices by 4.4% in the year to July, the highest since 2005.
None of our consumer-focused companies or trade associations bother to explain their decisions to raise prices to customers.
Have we ever seen such an explanation from one of the bakeries why a piece of bread costs Tk5 in a roadside tea shop that serves low income customers, or why a small cake of birthday in a branded store costs 200 Tk more than last year.
A number of consumer goods groups market a wide range of items, but none bother to explain when prices jump and why. Our manufacturers and marketers of consumer goods operate far from standard business practices and accountability to customers. That’s why one egg cost us 3 Tk more while rising fuel price only add 3 Tk for every 100 eggs to be shipped by van to Dhaka from Gazipur, one kg of vegetable cost us 20-30 Tk more while the transport cost only increased by 0.50 Tk per kg if the recent increase in fuel prices are taken into account.
Even then, market regulators seem to be waiting for common sense to prevail over commodity traders. Consumer Rights Director General AHM Shafiquzzaman calls on leaders in the trading community to discuss ways to discipline the market. “We answer calls on our 16121 hotline and do our best to respond to consumer complaints that flood our offices. But we cannot solve all the problems alone. There are other agencies,” he pleaded. .
Since fuel price hikes always distort market prices much more than they should be, these hikes should be accompanied by a clear table of bus, truck or launch rates per km with immediate effect. Each time fuel prices are increased, it takes days for the BRTA to meet with transport owners to set new rates, which are not implemented as agreed. There is no one to set truck tariffs for goods, while BIWTA sets waterway tariffs.
Dollar price volatility is also a common excuse cited now. Rice imports this year have been the lowest in years. So why did rice prices soar during the peak season despite a bumper harvest and even before fuel prices rose? What does fish, meat, eggs or bottle gourd have to do with rising dollar prices? Aren’t these cruel jokes with consumers of all income groups, when inflation is around 7.5% and even the Minister of Finance predicts that the latest increases in fuel prices will push even further?
Consumers are the primary drivers of private sector-led economic growth. Uninterrupted inflation, coupled with the fanciful raising of prices of consumer goods by a section of unscrupulous traders and the inability of market regulators to keep rising prices within justifiable limits, will limit the ability of consumers to spend. . Rising prices will force consumers to tighten their purse strings, and if they buy less, businesses will fall flat. Business growth will be stunted. The middle class people of the consumer society are the engine whose demand propels the growth of the private sector. Don’t trade bodies and consumer-focused companies owe their consumers an explanation for why retail prices have risen disproportionately with increases in fuel prices?
Lately, the prices of eggs and farmed chicken have marked a significant drop in the retail market over the past two days following a three-day campaign by the consumer rights protection agency and a fine imposed on a number of egg traders. However, egg prices started falling soon after the Minister of Commerce announced on August 17 that eggs would be imported if prices did not fall.
This means that unusual price movements can be controlled if government instruments intervene.
However, large poultry farms pocketed an additional Tk 520 crore in just 15 days of volatile poultry prices, the Bangladesh Poultry Association reported on Saturday, accusing a dozen large companies of price manipulation. During inspections of the kitchen market, the consumer rights protection agency also exposed these perverse practices of major market players. Stabilizing the rice market is their next mission as prices for the staple are up 12% to 21% from a year ago, chief AHM Shafiquzzaman said.
Can consumers be assured that something good will also happen in the rice market?