Why can’t we have a Maximum Retail Price (MRP) for each and every item on sale?

By KRJ Yash

Ce qui compte vraiment…

All the foods items with the label ‘Made in Mauritius’ will go down in price during the two weeks preceding Republic Day. This is the case every year – supermarkets (GSR, WAY, Jumbo, SuperU, etc) will be distributing pamphlets promoting local products. Why is it that ‘Made in Mauritius’ products are promoted only for a week or two? Our neighbours in Reunion Island have embarked on a long-term project to sustain their local industries – the prices of pork, beef, poultry, milk and milk products produced locally were cut by 5 to 20% on Monday 24^th January 2011. 

Would it be too much to expect a similar initiative from our local producers? Any reason is good for the prices to go up. However, we rarely see the prices coming down. Probably, it makes business sense for most local producers to operate as cartels in their respective markets. Surprising, isn’t it that poultry or yoghurt of different brands can be bought at the same price in all the shops? Is it more profitable for them to compete solely on brands? Can the government and the local producers not come up with a more sustainable method to grow the local industries, a method beneficial to both the producers and consumers?

In Mauritius, we consume mostly imported goods. Every time there is an appreciation in South African Rand, Euro or USD, there is an increase in prices of imported goods. Do we see a similar decrease when the currencies depreciate? Is it ever absorbed by the importers? In the 2008/09 Budget, the Minister of Finance removed customs duty on almost all imported foodstuffs. At the time, the price of petrol was at its peak and this, subsequently, inflated the freight costs which had a significant fuel surcharge inbuilt therein. Immediately after the Budget exercise, there was a drop in the prices of imported foodstuffs. However, it did not take long for the prices to climb back up again. Why is that so? Did the price go up in the country of origin? Did the importers increase their mark-up to the detriment of consumers? How exactly is the price we pay at the retail outlet determined? Shall we ever know?

What is the role of ACIM? Is it financed by taxpayers’ money? Some would argue that the annual allowance is less than Rs 1 million but I still believe that ACIM can play a more significant role in the protection of consumers. What about the ministry responsible for consumer protection? A few months after his appointment last year, the Minister pointed out that consumer protection involves not only prices but quality and after sales service. However, I guess that we should at least start by getting the prices right. ACIM should work in close collaboration with the Ministry for Consumer Protection so that there is no duplication of work.

There is also the fact that some foodstuffs are sold at widely different prices in the different retail outlets. This is another cause for concern. Why can’t we have a Maximum Retail Price (MRP) for each and every item on sale? The consumers will at least be comfortable with the fact that there is a ceiling on the price. Of course, there will be retail outlets selling below MRP but, at least, none will sell above the MRP. If, in a huge country like India this is feasible, I wonder why we do not have an MRP for all products sold in Mauritius. I am sure the Indians will be more than willing to help us formulate the MRP system…

* Published in print edition on 4 February 2011