Retailers sabotage bid exposed -Manufacturers never increased prices

by Sunday News Online | Sunday, Oct 15, 2017 | 4243 views
Mr Busisa Moyo

Mr Busisa Moyo

Tinomuda Chakanyuka, Senior Reporter
UNSCRUPULOUS retailers are sabotaging the economy as they have maintained high prices for locally produced goods although it has emerged that manufacturers of the goods never increased prices.

The retailers increased prices of most goods after 23 September citing increased demand after consumers went on panic buying following social media frenzied lies insinuating that the country was headed for shortages because of foreign currency shortages.

However, the situation normalised after the Reserve Bank of Zimbabwe chipped in with increased foreign currency allocations to support critical sectors. It also emerged that the social media statements were lies meant to create panic buying of basic commodities. What has also emerged is that even after manufacturers have increased production and are now meeting demand, retailers who do not need foreign currency to acquire locally manufactured goods have maintained high prices.

Further, the manufacturers of the goods have not increased the prices for retailers raising questions on why the retailers are still maintaining high prices when they are buying at old prices. Locally produced two-litre cooking oil, which used to sell at around $3,70 before the price madness is now selling in most shops at between $4,50 and $5.

However, Oil Expressers Association of Zimbabwe (OEAZ) chairperson Mr Busisa Moyo said companies that produce cooking oil never increased the price of the commodity.

“Manufacturers are still selling oil to the traders at under US$3,40 per 2 litre including delivery. The Oil Expressers Association of Zimbabwe has encouraged members and the distribution chain (wholesalers and retailers) to exercise restraint on price increases,” he said.

An enquiry at Tongaat Hullet in the Lowveld which produces sugar also revealed that the company was still selling a carton of the commodity for $17. A carton contains 10-two kilogramme or 20-one kilogramme packets of brown sugar.

“We never increased the price of the commodity and we are still selling sugar at old prices,” said a salesperson at the company.

However, the price of sugar in most retail shops has increased from $1,80 to $2,65 per 2kg packet.

Confederation of Zimbabwe Retailers president Mr Denford Mutashu acknowledged that some retailers were reaping off consumers.

“We are quite aware of what is going on and we are seized with the matter. What we have done is to engage the Government to ensure that the situation normalises. Some retailers have a multi-tier pricing system, different prices for cash and plastic money purchases. That should stop. Retailers should always observe best practice,” he said.

Mr Mutashu said some manufacturers were also indirectly involved as they were deliberately holding to stocks to create artificial demand and then sell to retailers they have links with.

“Some manufacturers are causing these shortages which then lead to price hikes as laws of supply and demand apply. We have received reports from some of our members who allege that some cooking oil producers are supplying their products to a select few who then charge their own prices,” he said.

Confederation of Zimbabwe Industries (CZI) Matabeleland president, Mr Joseph Gunda said the practice by retailers was tainting the local business community as people tend to think what was happening in the retail sector was symbiotic to all sectors.

“This level of profiteering is a Zimbabwean disease that CZI does not condone. It’s exploitation of the ordinary consumer in the street that requires a national change in culture and attitude,” he said.

The Government said it was waiting for a Cabinet Taskforce which was appointed to look at the price before coming with a position. At one time Government mooted reintroducing price controls.

Industry and Commerce Minister Dr Mike Bimha told Sunday News yesterday; “We are carrying out an exercise checking on the prices on a daily basis.

There is a taskforce that is looking at that. Once they are done with the exercise we will then decide on the way forward,” he said.

President Mugabe has also condemned businesses that are bent on derailing the economic gains through unexplained price increases.

A snap survey by Sunday News last week showed that prices of some basic commodities have risen up to 50 percent from the period prior to the 23 September price madness. A 20kg bag of mealie-meal which was selling for $11,99 has gone up to between $13 and $14 and a packet of 2kg sugar which cost $1,99 now costs $2,65. Washing powder which cost $4,80 for a 2kg packet now costs $7,15 and a bar of laundry soap which cost between $0,90 and $1 is now selling for $1,65. Similarly bath soap has gone up from an average of $1,20 to $2 per tablet while a 100ml tube of toothpaste has gone up from $1,05 to $1,65.

>
Like it? Share it!
  • Ziso

    Manufacturers are an honest bunch! Well done for being restrained!

    Though you are the ones that benefit most from Government interventions. Not that you shouldn’t, but downstream entities like retailers are more exposed to issues/fluctuations relating to the liquidity crisis

  • Ijaha leNkabazwe

    The question is:why did prices stabilise when RBZ injected more forex.I am no economist but I think someone somewhere is just passing the buck. Why would Choppies want to “sabotage the economy” for an example?

  • Idiot

    supply and demand period (basic economics) or is it?