Retailers condemn diversion of basic goods
THE Confederation of Zimbabwe Retailers (CZR) has condemned wholesalers and major supermarkets that have been accused of diverting basic goods to the informal sector in a bid to mop up foreign currency.
According to the consumer watchdog, the Consumer Council of Zimbabwe (CCZ), some wholesalers and major supermarkets are allegedly diverting basic goods to the informal market, giving a false impression that some basic goods are in short supply.
The basic commodities are then easily accessible from the informal market in partitioned shops that are mushrooming in several buildings around the Central Business Districts of most towns and cities where they are sold in foreign currency.
In an interview, CZR president Mr Denford Mutashu expressed concern over the issue.
“The CZR urges security apparatus to not only confiscate but effect arrests to those found hoarding or diverting goods to the black market in pursuit of hard currency.
“We condemn the practice and urge those who may have been lured into the malpractice to stop forthwith,” said Mr Mutashu.
On the other hand, he said the biggest challenge facing retailers and wholesalers was limited supply of some basic goods.
Mr Mutashu said this was because there were no more payment terms from manufacturers, and all goods have to be paid for before delivery.
“Retail and wholesale business has no capacity to shift to cash payments upfront, it strains the business’ cash flow and may force shop closures,” he added.
He said the other issue affecting local businesses was smuggling of low-cost imports as corrupt activities at unofficial entry points along the country’s borders were threatening the country’s economic revival efforts.
CCZ Matabeleland regional manager, Mr Comfort Muchekeza, said they have noted the trend of informal markets stocked with basic goods that are not available at major supermarkets.
“The situation on the ground is that basic goods are easily available from flea markets and these other mushrooming shops which have been partitioned in one big space.
“All those small shops have almost all basic goods of which some of them are not readily available from wholesalers and supermarkets,” said Mr Muchekeza.
He said they were suspecting that wholesalers and supermarkets were sponsoring some informal traders to mop up foreign currency, which was affecting consumers without access to foreign currency.
Mr Muchekeza said consumers were struggling to get mealie-meal, cooking oil, bathing soap and other basic goods on the shelves of some major supermarkets.
“However, those products are
readily available in the informal market. Every basic commodity is found at the partitioned shops and sold in foreign currency.
“Consumers now believe that it’s either wholesalers are supplying small shops with products for resale or major supermarkets are doing that.
“We do not have tangible evidence to say which supermarket or wholesaler is diverting the products, but it is clear the products are not there in some formal markets, but they are there in these small shops.
“Could it be the producers themselves who are not then selling to the formal market and opting to sell to these small shops? We believe there is an underhand dealing taking place. The sprouting shops are not even licensed. Authorities should look into that.”
Nonetheless, some informal shop owners said they imported their goods from South Africa.
“There was a relaxation of the law on importing basic goods.
“Most of these things are now duty free so we are able to import from South Africa and still make a good profit,” said an informal trader in Bulawayo who requested anonymity.