How retailers ripped you off. . . Manufacturers out of price madness, Goverment rules out price controls

by Sunday News Online | Sunday, Oct 14, 2018 | 5917 views
Busisa-Moyo

Busisa-Moyo

Dumiasni Nsingo/Robin Muchetu/Munyaradzi Musiiwa, Sunday News Reporters
RETAILERS have been accused of profiteering after wantonly increasing prices of most locally produced basic commodities when manufacturers have not increased their prices. Moreover, cost drivers such as fuel and electricity have not gone up.

Last week, most retail shops increased prices of goods including locally manufactured goods, despite no apparent trigger effect. A survey by Sunday News exposed the greediness among retailers as manufacturers, who mostly bear the brunt of sourcing inputs to manufacture the products, did not increase prices of the goods they manufacture. The price of fuel, electricity and water, among other major cost drivers have also not gone up.

Further, most of the manufacturers said they had enough supplies and were still accepting all forms of payment methods used in the country including use of plastic money. Oil Expressers’ Association of Zimbabwe chairman Mr Busisa Moyo who is also the chief executive officer of United Refineries Limited in Bulawayo said it was baffling to note that a 2-litre bottle of cooking oil went up in some shops to as high as $15.

“All members of the Oil Expressers’ Association of Zimbabwe are selling at prices between $3,15 to $3,50 and have recommended selling prices of between $3,70 to $3,99,” he said.

In Filabusi and most rural areas and even in some urban centres, it was reported that some businesses were selling their products at mark-ups exceeding 400 percent. Some were reportedly demanding foreign currency, blaming the prevailing foreign currency rates on the black market. However, the manufactures said they were not selling their goods in foreign currency hence this could not be a justification from retailers.

“We are in a multi-currency system and the Government has assured parity so customers can settle in any form allowed under the multi currency system,” said Mr Moyo.

He said although the sector has not been operating at optimal level, it is capable of supplying the market.

“While the cooking oil sector has been operating between 30 to 40 percent since April 2018, we managed to keep delivering to the retail trade and wholesale trade. We were totally unprepared for the surge in demand driven by arbitrage and speculative behaviour,” said Mr Moyo.

Investigations also showed that Tongaat Hullets, the Lowveld company which grows sugarcane and processes it into sugar did not also adjust its prices. A saleslady at the company said the price of a case of sugar has remained at $19,40. A case has 10, two-kilogramme packets of sugar.

“It’s surprising why the retailers hiked the prices. For the record we have huge quantities of sugar and any wholesaler can walk and buy using any form of payment method any day, any time,” she said.

Some retailers were last week selling a two- kilogramme pack of sugar for as high as $5. In a statement, the Zimbabwe Sugar Industry called the retailers to order and to behave responsibly. Sunday News also discovered that some butcheries had increased prices of beef but prices paid by cattle buyers to farmers have remained almost the same.

“We are unable to take orders at the moment, we have been inundated with meat orders, and we are out of beef, chicken and pork. Wholesale prices have risen sharply and stocks are very low. We do apologise for the ridiculous prices for today,” read a notice from West Acre butchery last week.

One product that has also been affected is cement. Most shops increased the price of the commodity with some even pegging it in foreign currency. However, PPC Zimbabwe managing director Mr Kelibone Masiyane said the company has not adjusted its prices since April 2012 and was also receiving tremendous support from the Government hence no need or call to adjust the prices.

“We haven’t increased our pricing which still remains the same as before and at the moment obviously with the support of Government there is no intention of adjusting that and we urge all our customers to resist these high prices because we do have some of our recommended retailers that are actually selling at recommended retail prices,” he said.

The recommended retail price for a 50-kilogramme bag of cement for Bulawayo retailers should not exceed $12. The company, last year commissioned an $85 million milling plant which has resulted in increased supply of the product in the northern parts of the country.

In Midlands, Sino-Zimbabwe Cement company which has about 25 percent market share in cement sector insisted that its products were on the market and readily available at the old price. Sino-Zimbabwe Cement sales and marketing manager Mr Ibiam Sengwe said their products were on the market and shops should approach them for supplies.

He said the company produces three types of cement and the cheapest is $7, while the most expensive is going for $11 per 50kg bag. He said the company was accepting any form of payment including bank transfers and there was no justication for hardware shops to insist on foreign currency payments from customers.

Industry representatives poked at retailers and said their actions were against the spirit of nation building. Confederation of Zimbabwe Industries (CZI) president Mr Sifelani Jabangwe said the price increases of basic commodities by retailers was unwarranted taking into cognisance of the fact that manufacturers have not increased prices of goods supplied to them.

“Especially those 16 basic commodities the prices should not have gone up because the producers have not  increased their prices. We are actually engaging with RBZ (Reserve Bank of Zimbabwe) for continued support,” he said.

Confederation of Zimbabwe Retailers’ president Mr Denford Mutashu blamed the price increases on the informal sector.

“Most of the price madness is in the informal sector, most of the informal traders have taken advantage of the shortages on the market to increase prices and if you check with most big formal retailers and wholesalers they have maintained their mark ups,” he said.

Mr Mutashu said most reputable retailers and wholesalers have shied away from the unwarranted prices.

“They have not taken advantage of the prevailing situation and are actually taking their goods out to the market at normal prices, so as long as a manufacturer or supplier has not increased prices retailers and wholesalers are urged to maintain normal pricing,” he said.

Mr Mutashu, however, lamented that some manufacturers and distributors had halted supplies to retailers and were also culpable in the blame game.

“The challenge that we have is that some manufacturers and distributors have stopped giving us products, which has created a  gap that you see. Fundamentally, right now we are not so much focused on the pricing as it was but we are primarily focusing on availability as most shelves have gone empty,” he said.

Mr Mutashu said manufacturers should also expedite supply of goods to retailers so as to curb artificial shortages and unwarranted price increases of basic commodities by some unscrupulous individuals.

“So it is actually a critical situation where we are urging manufacturers and suppliers to exercise restraint and ensure that they begin to pump goods onto the market as failure to do so will create any artificial shortage which most people would take advantage of hence the arbitrage activities that you would see arising from speculative tendencies,” said Mr Mutashu.

The Government has called on retailers to conform to proper business practices, although it maintained that it will not introduce price controls.

“Government’s position on price controls remains the same. While Government is concerned with wanton price increases, it will engage with business in order to address challenges and build consensus on measures to grow the economy. Government will not dictate prices,” said the Ministry of Information, Publicity and Broadcasting Services on its Twitter handle on Friday.

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  • Charli

    It is nonsensical to blame the retailers. The whole problem lies with the government who is failing to control what is happening on the ground. The government has its arms namely the Consumer Council of Zimbabwe, the Standard Association of Zimbabwe and etc. What are their functions to the consumers? They sit on their smelly bums doing nothing. Surely there was/is absolutely no reason why prices of commodities should have been hiked. Drivers of production remained stagnant or increased marginally but not to an extend to warrant an abnormal price increase as currently experienced. If the government was serious in protecting the consumers, they would have set an example of withdrawing licences from the concerned retailers and also confiscate hoarded products. It is unheard of in a normal environment that cooking oil priced at $3.70 jumps price to $15.00 in a matter of minutes. That product was made on old production drivers. What sort of nonsense is that? The bloody government is too soft at where they are supposed to protect the consumers yet the latter is the backbone of the economy. There’s total disregard of the 7Ps in our country.

  • zimbotry

    Again the Government blames everyone except themselves. Try lack of supply. And have you actually been in a shop recently and seen the empty shelves?

  • matshona zinja

    SUNDAY NEWS EMPLOY NDEBELEZ WHY TSHONAZ ONLY. YOU BETTER RELOCATE TO MATSHONALAND

    • Richard Sautah

      Maybe all Ndebeles in Mashonaland should all relocate

      • matshona zinja

        THEY ARE NO NDEBELEZ IN MASWINALAND

  • Dakwa

    Surely does this paper have an editor? You can’t allow people to peddle hate speech like Matshona Zinja on your platform.Good journalism will dictate that only constructive criticism and balanced reporting take precedence if you are to reach and inform a wider audience.We live in a modern society were any form or shape of racism, tribalism etc should be condemned.