By Claude Gunasekera

The prevalent Price Gouging of almost all the goods in the country has created a double whammy to the citizens of Sri Lanka despite their hardship with Covid-19 pandemic. Price gouging is illegal during a state of emergency in the laws of consumer protection. Some countries even without laws, issue executive orders to prohibit the action during times of emergency or during a pandemic.

Consumer prices hiked at a faster pace than never before. Except for very few locally produced food & household items and some pharmaceutical, all the other prices have increased. Despite the import restrictions, all items that are permitted to import are in unaffordable prices, including products that are locally manufactured with imported raw material. Even the 100% local produce have increased their prices due to the price increase of Petroleum, Gas and other production overheads add on to it keeping additional margins on the increased cost of living.

“30 percent of Fast Moving Consumer Goods (FMCG) in a retail store is complete direct imported products and 35 percent of local products dependent on imported raw material and the rest of 35 percent only considered complete local produce. The Price Crisis is mainly with the first and second categories consisting most demanding essential goods, which is 65 percent of regular day to day consumer needs. Meanwhile prices are increased for at least another 20 percent of local produce in the complete local produce category. It is estimated that around 85 percent of consumer goods are increased in price” said Charitha Subasinghe, President- Retail at John Keells Holdings PLC, Head of Keells Super Retail Chain. He said Inflation is a biggest challenge globally and Sri Lanka has its own foreign exchange issues and import restrictions thus creating a spike of price and product shortages.

Glenfrey De Mel, Chairman Star Media Network, a graduate of the Colombo Law Faculty who is engaged in Human Rights claimed that “It is a democratic right of the masses to have a purchasing power over essential commodities while human life and the price of essentials are closely related. When prices of essentials become incompatible with the financial well-being of the people, there is no end to the agony of the poor and under privileged families”.

“The present government failed to take right decisions, at right time, to control the existing price gouging. The government failed to implement appropriate policies to balance the economy and control the cost of living of the masses. A few Big Traders dominate the entire imports of essential commodities and control the whole national market with unethical influence of the government. The government supports them for political gains without even considering the majority of their voters who elected them. Therefore, the government is solely accountable for this stern blunder” said Dinusha Sampath Liyanage, Chairman / Managing Director of Sampath Group of Companies, the holding entity of ‘Sampath Food City’ Supermarket Chain. He told ‘The Island’ that people’s elected government is responsible to provide necessary needs of the citizen especially the essential foods and services at an affordable price and create a balance between income and purchasing power while maintaining an acceptable inflation rate.

Liyanage further told ‘The Island’ that instead making allegations to the government or to the big trader, as an entrepreneur engaged in the retailing business, he could offer maximum possible discounts at all 20 outlets of the ‘Sampath Food City’ Supermarket chain at this crucial juncture as a concession to all walk in customers. He said profits are required for survival of a business, but profitability is not the prime aim at this moment since he realizes the anguish of the innocent consumer. Sampath Supermarket chain is the leading retail network in the Kalutara District with a large customer base over 250,000 patronizing their outlets. He said certain fruits and vegetables that are sold in his supermarkets are direct from his own farms and since there is no intermediary trade margins involved they could pass on that price benefit to the customer under the theme ‘Direct from Farm to the Consumer Hands’. “We are unique compared to other retail chains, since we offer discounts to all the products available in house. We offer 25% discount on fruits & vegetables and many other special discounts time to time on main essential goods such as rice, wheat flour, sugar, dhal, onion, potato, milk powder, biscuits etc.

A. B. Wijesinghe, Chairman ‘Lion Super’ retail chain, functioning 7 supermarkets in the outskirts of Kandy told ‘The Island’ “We pitch a different customer segment than the national supermarkets does. Our primary concern is the low and middle income ordinary consumer in the neighborhood simply the ‘villagers’ with a focused brotherhood relationship approach with a personalized service. He said they are catering to them with much understanding of their purchasing power and offer the best possible prices even less than the neighboring retail store. He also said the lowest price theory began not during this crisis period, but the core objective of setting up the original ‘Singhe’ retail chain was to offer the lowest price in the market. He continues to move on the same mission under the new brand of Lion Supermarkets.

“We operate 7 supermarkets in the outskirts of Kandy and launched a ‘Double Discount’ offer at all our outlets as a special concession to deprived customers during this hard time, offering extra discounts for many products through the support of our supply chain. We were able to negotiate additional discounts from most of the suppliers and offered the whole chunk direct to our customers. We are able to make our customers much satisfied and appreciated with this massive price decrease concept” said Indika Sampath, Head of Operations ‘Lions Super’.

In addition it was found all the modern trade retailers such as Lanka Sathosa, Cargills Food City, Keells Super, Laugfs Supermarkets, Arpico Super Centers, Glomark, Spar, Salinda Supermarkets, Hewage Supermarkets and many others are offering attractive discounts to their customers. Some may look at it as they do a business promotion but yet ultimately customers will benefit by their offers resulting in some what a concession at this crucial time.

“We service number of retail outlets in the country with a range of local consumer food products. We don’t produce or distribute a single imported product, but the sales turnover is dropped by 40 percent during the month of November. Products that were supplied in the previous months were still lying at retail shelves as never before. This clearly shows the inability of consumers to spend. We see the people are buying only the most important items to survive the day. Most people have reduced their usual consumption due the high cost of living. We are even struggling to operate our factories and it’s a question how we could continue to run the business and remunerate our factory workers and it’s time to retrench staff and cut down our overheads” said Jayantha Perera Chairman ‘Jayz Kitchen’ a leading manufacturing venture of spice food.