Traders: High Costs Drive Prices Up
Local traders are unable to abide by the directive and deadline issued by the Ministry of Domestic Trade, Cooperatives and Consumerism (MDTCC) to reduce prices following a drop in September’s fuel prices.
Traders have been given a one-week deadline, which expires on September 15, 2015.
Traders said that they could not adhere as other costs were rising and that there is no way they can meet the one-week deadline.
Malaysian Retailers-Chains Association (MRCA) has suggested for the deadline to be extended to at least three months, so traders can look into the overall cost before the prices can be reduced. Their rationalisation was that it can be quite difficult to lower prices, which were primarily determined by suppliers, while operating costs such as rent, electricity and wages still remains high.
MRCA also pleaded to MDTCC to suggest how prices can be reduced and it will be helpful if the Government initiates by lowering electricity tariffs and controlling rental costs.
The Malaysia-Singapore Coffee Shop Proprietors’ General Association intervened saying that they can only adjust prices if the cost of raw material goes down. For now, they will carry on with the current prices as they have overheads and GST to pay for. For example, in Johor, the cost of water is the highest in the country, so traders have to account for that too in determining prices.
Malaysia-China Chamber of Commerce also came forward saying that the price of imported raw materials had also gone up due to the weak Ringgit – and this is reflected in prices of goods.
Petaling Jaya Coffeeshop Association also voiced out saying that the public must understand what contributes to a drink or meal – it’s not just RM0.10 of petrol; there are raw materials, rent and labour. The time frame given is too short and the guidelines are too broad.
Pan Malaysia Lorry Owners Association said the drop in fuel prices could not justify a reduction in transport fees due to rising spare part prices – and therefore they too can’t lower the transportation charges on retailers.
FOMCA welcomed the MDTCC’s determination to keep a close check on prices. Malaysia imported food products were worth over RM40bil last year, adding that factors besides fuel cost affected prices of imported items. If there are severe floods in India, the price of beef from there may go up. The weakening of the Ringgit is a major issue too because importers will have to pay more.
Malaysia Muslim Consumers Association urged MDTCC to remain steadfast against errant traders, saying that the latter often used rising fuel costs to justify hikes.
MDTCC officers would be conducting prices checks, warning traders that action would be taken against those found making excessive profits.