EDITORIAL COMMENT: Rampant price hikes: Govt must intervene to protect consumers

reduce fuel prices

GOVERNMENT should seriously consider taking drastic measures on retailers and wholesalers who are ripping off consumers by wantonly increasing prices of basic goods because the situation is getting out of hand. Clearly some unscrupulous and greedy entrepreneurs are taking advantage of the stance taken by the new dispensation to let business conduct its affairs without undue interference from Government and are profiteering big time at the expense of the long suffering consumer.

Since mid-last year, businesses have been hiking prices of goods wantonly and without justification and we wonder whether they are daring the Government to rein them in using extraordinary measures or are on a mission to sabotage the new Government. There have been numerous efforts by various stakeholders including the Reserve bank of Zimbabwe, Competition and Tariff Commission, representatives of retailers, wholesalers and manufacturers and central Government to try and resolve the issue of pricing but these seem to have hit a brick wall.

We are aware of the various challenges confronting businesses which include a shortage of foreign currency to import critical raw materials and the general high cost of production in Zimbabwe but we believe some of the price increases are totally unjustified. Businesses have argued that they source foreign currency from the black market to import their goods and pleaded with Government to assist them to pay for these imports. They cite the high cost of replacing their stock as a reason for the continued hike in prices. But some of their colleagues contend that there are unscrupulous businesses that are out to profiteer using the cover of lack of foreign currency to rip off consumers. Some of these businesses access foreign currency from the RBZ but go on to charge exorbitant prices which goes against the spirit of fair competition and ethical business practices.

In yesterday’s edition of The Chronicle, we published an article in which parents in Bulawayo blasted retailers over escalating prices of school uniforms and stationery ahead of the opening of schools next week. Retailers blamed manufacturers for increasing prices while manufacturers in turn accused retailers of profiteering, saying they had not increased prices.

Scores of parents said they had resorted to buying most requirements from vendors as their prices were in some cases, half what registered retailers were charging. Toppers Managing Director Mr Mohamed Zak Patel said they increased prices due to an increase in raw materials’ prices but he was contradicted by Confederation of Zimbabwe Industries (CZI) Matabeleland Chapter president Mr Joseph Gunda who said manufacturers had not hiked our prices.

Confederation of Zimbabwe Retailers president Mr Denford Mutashu was forthright in his assessment of the situation, saying the hikes were a manipulation of consumers.

“In as much as there are challenges like foreign currency, I think there is serious manipulation by retailers. I have never in my life come across a counter book that costs $9. January is a term where schools are changing uniforms and some children changing schools, so this has been a burden and will continue being a burden as long as prices continue escalating. Sanity should prevail. We really understand and sympathise with manufacturers and retailers that are importing material but the rate at which prices shot up is unreasonable,” said Mr Mutashu.

“We are in the process of engaging relevant authorities to come up with a much effective economic, social and political solution. It’s an economic problem but it also affects the social life and politics. The other problem is that there has been an emergence of ‘fly by night’ businesses that are not even registered. They are the ones contributing to this lawlessness.”

We totally agree with the sentiments expressed by Mr Mutashu and urge Government to clamp down on businesses that are out to reap huge profits at the expense of consumers. The blame game between manufacturers and retailers suggests that there is a great deal of dishonesty by either or both parties and Government should get to the bottom of the matter.

We also welcome the warning issued by the CTC to wholesalers and retailers engaging in price fixing to eliminate competition and the commitment by the body to invoke the law to deal with errant businesses. Certainly there appears to be collusion in setting prices, a practice that is illegal under the Competition Act.

Government should also consider enacting a consumer protection law to give consumers recourse when they feel ripped off. It is sad that at a time when the new Government is working hard to create a conducive environment for business to thrive, some unscrupulous entities are reverting to old ways of unethical practices.

Unfortunately, they might force the Government’s hand and find themselves incurring the wrath of authorities. Certainly, Government would be within its mandate to intervene and protect the rights of consumers who are bearing the brunt of these incessant price hikes.

Article Source: The Chronicle