COMMISSION’S MAKEOVER

ACTIVATES COMPETITION, PRICE OF GROCERIES SLASHED

Anyone else noticed the recent massive reduction in prices of groceries and general everyday items?

There are two reasons why in recent days we have seen a return of prices of groceries which we paid several years ago:

1. The increase in powers given to Fijian Competition and Consumer Commission which now allows them to question supermarkets on their mark-ups; and

2. The new (old) player in the supermarket sceneMaxVal-u has brought in fierce competition and this was apparent in a war to cut prices last weekend.

The Fiji Commerce Commission effective from August 1, 2017 was known as the Fijian Competition and Consumer Commission (FCCC).

The name change indicates that the FCCC will focus both on consumer protection and the regulation of competition between traders.

With the name change, people know that the Commission does not only look after the affairs of traders but also the rights of consumers which is a role that the Commission always had since it was established. It also represents the Commission becoming a multisector regulator.

The need to give the Commission more powers and for the Fiji Revenue and Customs Service to share information with the Commission arose when the Government realised that despite decreasing duty on several items, the benefits were not always passed onto customers. For example, despite a massive reduction in the duty of cereals, the price often remained the same. What happened here is that while companies were saving on the duty reduction, they increased their markups. They made more money while the idea behind the reduction, which was to give consumers reduced prices, did not eventuate.

They continued making money while consumers continued paying the hiked price. To put an end to this practice, the Fijian Competition and Consumer Commission was given a makeover. They have been given the powers to question wholesalers about the failure to pass on the benefits of reduced duties to consumers. And, the drastic reduction in prices seen lately is likely a flow-on effect of this. Competition in any market serves consumers best. With the rebranding and emergence of Maxval-U, consumers have been at the winning side as well. Just in the past week, a war price broke out between supermarkets in Fiji and a true picture of how low prices can go emerged.

As the Commission continues with its work and as competition grows Fijian consumers can expect better deals and a real picture of the level of mark-ups will emerge.