Food price increase despite zero rating

Following the cabinet decision to put in place an interim pricing order to control prices of specific food items, the Consumer council has released details of a survey highlighting startling irregularities in prices of items over the last two years.

According to a survey by the Council, consumers are still paying exorbitant prices for items which are supposed to be under zero rating as directed by the government.

The council said in 2008, government removed duty and VAT on four basic food items, cooking oil, rice, canned fish and local eggs, however their survey found that the price of 170 gram canned tuna increased from an average 78 cents to $1.41 per can and the price of 425g tinned fish increased from $1.55 to $2.12.

It also highlights that the price of 10kg pack of long grain rice increased from $9.02 to $22.51 while the average price of cooking oil increased from $2.69 to $2.98.

The Council said in April this year, consumers were also hit with an increase in price of dairy products like powdered milk and local butter which were under percentage price control.

In addition, the Council said there have also been increases in the price of meat as their survey shows that the price of a number 12 chicken was $8.07 last year but in July 2010, it cost $8.73.

According to the council, the price of 1kg lamb chops which used to cost an average $10.18 per kg now costs $13.09 a kilo, while the price of lamb neck rose from $5.15 for last year to $7.28 during the survey in June this year.

Under the Commerce Price Control, the Commerce Commission will impose an appropriate pricing formula that ensures minimum mark up costs are imposed and there is no "double dipping" by importers, wholesalers or retailers.
 
Commerce Commission Chairman Dr. Mahendra Reddy when contacted said that they are still awaiting the details of the price control order and will comment after the industry stakeholders are informed.


Story by: Roneel Lal