Let’s end this price madness
“Retailers should sell to individuals and should ration goods in short supply, like bread, cooking oil etc, and prices should be monitored so that those found on the wrong side of the law can be penalised heavily or have their licenses withdrawn.”
SOMETHING must break”, otherwise we cannot go on like this with prices galloping like horses competing at Ascot or Borrowdale racecourses,” a man fumed outside a shop as he stopped to greet a woman entering the same shop.
“Well, I’m sure things will get right,” the interlocutor responded, betraying her faith in God’s ability to heal Zimbabwe’s economy, now virtually on its knees.
In the short, imaginary conversation outside the shop, the angry man gave no possible reasons for the commodity price hikes, which Bulawayo retailer and National University of Science and Technology academic Mr Rodgers Hove set out to do this week in a detailed conversation with this communicologist.
He said: “A breakdown in the chain of distribution was the case long back before a systems-breakdown prior to the 2006 era (with) manufacturers selling to wholesaler, wholesaler selling to licensed retailers, licensed retailers selling to consumers — the public.
“The systems allowed proper supervision and monitoring controls by policy makers as well as protecting the wholesalers and retailers against losing customers,” Mr Hove said.
He pointed out that manufacturers would concentrate on production while wholesalers concentrated on storing and selling in bulk to licensed retailers who dealt with individual customers.
“The manufacturer would put a small mark-up to the wholesaler, the wholesaler a small mark-up to the retailer and in turn the retailer a small mark-up to the customers,” he noted.
There was no way a retailer would get a higher mark-up than the manufacturer as is the case now.
“When there were shortages for some reason, the wholesaler would ration retailers to ensure each retailer got a fair share and in turn, the retailer would ration customers so that everyone got the goods in short supply.”
But he said the chain of distribution had now been broken with the manufacturer sometimes selling directly to customers, including vendors and retailers.
Mr Hove said that now individuals and vendors bought goods from wholesalers competing with licensed retailers, and that in the process wiped out the few goods in short supply, which they then sold outside the wholesalers’ premises to the public at exorbitant prices, taking advantage of the fact that the wholesale has run out and the customer has no choice but to fork out the high prices.
“The retailer who is supposed to sell to the public now has no products and must sometimes buy from the vendor and has then to put up a small mark-up on an already increased price, thereby making the price a lot higher,” Mr Hove noted.
The licensed retailer employs people, pays VAT, income tax, PAY to the Government but the vendor does not.
“Who then is the culprit?” Mr Hove asked.
He said manufacturers, wholesalers and retailers can be controlled, but not so the vendors.
He said that as solutions, manufacturers should only sell to wholesalers and wholesalers to licensed retailers.
“Retailers should sell to individuals and should ration goods in short supply, like bread, cooking oil etc, and prices should be monitored so that those found on the wrong side of the law can be penalised heavily or have their licenses withdrawn,” Mr Hove said.
He added: “City councils should not give wholesaler and retail licences to a company operating on the same premises as these licences might be misused.”