Presentation on theme: "The Global Effects of Rising Prices: What Can We Do? The Role of Consumer Council in the Current Environment Panel Discussion Organized by the Economics."— Presentation transcript:
The Global Effects of Rising Prices: What Can We Do? The Role of Consumer Council in the Current Environment Panel Discussion Organized by the Economics Association of Fiji; Monday 28 July By Premila Kumar Consumer Council of Fiji
Talking Points How inflation is affecting consumer’s standard of living Role of the Council in the current environment
High Rates of Inflation leads to decline in the value of money because we have to pay more and more for the same goods and services Soaring food and fuel price rise has played havoc with household finances consumers can no longer live with in its income
Consumers Feeling the Pinch Weekly supermarket bill is getting bigger while the trolley load is getting smaller Salary/Wages remained fixed or others taking half pay as a result of reduced hours or facing 2%pay cut Consumers savings (if any) is eroding
All in All Consumers are suffering because any increase in importation, production, distribution and retail costs of goods and services are passed down to the consumers.
The Role of the Council in the Current Environment the Council Provides external pressure as a watchdog to create a fair and just delivery of goods and services represents and protects the rights and interests of consumers by identifying and articulating the policy issues that are of importance to them. conducts rigorous research and policy analysis on key consumer issues In regard to world food price increase, the Council engaged in several activities for Government intervention
Push for Reforms and Policy Change Conducted research to establish the increase in price of food from July 2006 to July 2007. The Council released the result calling the government to act by reducing duty and VAT on essential food items.
Push for Reforms and Policy Change Submission to the National Budget Consultative Process seeking for policy changes in key areas to alleviate hardship on the consumers. Rising cost of living is on the agenda. Made submission to the Government to control the price of LPG. This was done in 2007 and finally PIB has issued 14 days intention notice to the traders Unfortunately prescription drug is not under PIB radar and cost of other drugs are extremely high. For example the price of insulin has shot up over the years. It costs around $25 for a vial that lasts barely 2 weeks.
Push for Reforms and Policy Change Effective Use of Government Supplies (GS) Only 25,286 families receive assistance Opening the door of Government Supplies for the disadvantaged consumers to purchase essentials at subsidised rate
Inflation Rate Understated inflation rate is calculated by using the old basket of goods and services which do not truly represent the current consumer spending. Basket 14 years old: affects the inflation analysis and forecast both technically and fundamentally
Omission The new items not reflected in the current basket of goods and services are: the mobile phones, second-hand motor vehicles, new pharmaceuticals, CD Players, digital camcorders, ipod, home theatre system, digital cameras, microwave, computers, courier charge, internet charges, pay TV channels, money transfer charges Under stationery only two newspapers are shown.
In Principle…. There is greater probability that the value of inflation is distorted. It is therefore important to revise the basket of goods and services to eliminate distortions for effective policy intervention. The Council believes the inflation rate is running in double digits. Put simply, if inflation stands at 6.9 per cent in June 2008, a basket of goods that cost $100 in June 2007 a year ago would now cost $106.90. ie increase by $6.90 Unfortunately consumers are forking out more.
Rice Prices Product06JAN0708JUN% 06- 08 10KG RICE FMF SUNRISE PREMIUM LONGRAIN $10.99$11.90$17.9939% 10KG PUNJAS LONGRAIN RICE $10.99$11.90$23.9554% FIRCA should check to verify that new shipment has entered the country that could validate the traders’ claim of high landing costs. As of 2006 the price of FMF packed rice increased by 39% While Punjas rice increased by 54%.
Basic Food Items Qty060708% change Red Cow Powdered Milk 500g3.665.285.7836.68 Punjas Tea Leaves 200g1.501.461.616.83 FMF Flour4kg3.553.915.6637.28 Punjas Rice5kg5.306.019.2742.83 Punjas Cooking oil 750ml1.832.562.8335.34 Tin Fish Ocean 425g1.261.321.5619.23 Potato1kg0.971.141.4734.01 Total18.0721.6828.1838.88% An increase of $10.11 just for 7 items which a 38.88% increase. Basic Food Prices
Non- Food Items ItemsQty060708% Toilet paper 1 roll 0.880.891.3736% Bathing Soap 1 pkt 0.790.800.9315% Washing soap 1 pkt 2.232.983.3934%
Cooking Gas Prices Item060708 Fiji Gas 13kg37.50 41.00 Blue Gas 13kg 37.50 41.00
Regular surveillance of the marketplace The Council conducts price survey to keep a tab on the market behaviour and pricing Fiji is experiencing food shortages ( rice, sharp, salt and milk) which is created sense of insecurity amongst the people. This situation is further abused by the unscrupulous traders who tend to hoard or sell product as conditional item. For example one can only buy salt provided he or she has spent $30.00 in the shop. Hoarding fuel is a common knowledge. Expensive rice (Punjas ) sold first by removing FMF Rice which was cheaper.
Create awareness to deal with high cost of living Eat at Home Dining out is an expensive proposition Shop With a Plan If you stumble around the grocery store and fill your cart with everything that catches your eye, chances are you will spend a lot more money that you needed to spend. To minimize your cash outlay, prepare a shopping list before you leave home. Plan your meals for the week ahead, and make careful note of what you need to buy in order to prepare those meals. Once the list is made, purchase only the items on the list, and avoid impulse buys
Eat Before You Shop When you are hungry and you walk into a building full of food, there's a high likelihood that you are going to fill you cart with unnecessary and expensive purchases that appeal to your taste buds. To keep your costs down, eat first and shop on a full stomach. Shop Without the Kids Hungry, tired, cranky kids increase the amount of time it takes to get your shopping done. Every extra minute that you spend in the grocery store increases the likelihood of extra items finding their way into your cart, including toys and snacks designed to keep the kids quiet while you try to focus on finding a few bargains Create awareness to deal with high cost of living
Buy in Bulk Bulk buying can save you a significant amount of money. Pay attention to the prices and pick up the family size package if the per-unit cost is lower and you have a place to store it. Compare Prices and Stores Some consumers have trouble calculating the cost per unit in their heads, but it's something that gets a lot easier with practice. You can even carry a calculator. Looking at the brands and comparing prices is an easy way to shave a few cents off most purchases. Create awareness to deal with high cost of living
Shop Infrequently Reducing the number of trips that you make to the store each week or month reduces the odds of unnecessary purchases, and minimizes the amount of gasoline spent getting there. Check Your Bill Electronic scanners make the shopping experience faster and more convenient, but scanners aren't perfect. Be sure to take a look at the receipt to make sure your discounts were taken into account. Create awareness to deal with high cost of living
Grow your own vegetables/fruits Eat local produce. Try to avoid imports Car pooling Switch to energy saving lights and appliances
Ending remarks As some of you may realise, under the CCF Act we do not have the powers to enforce legislations but as a watch dog we do our best to safeguard the interest of our consumers by raising issues