Business

Price-gouging, a double whammy to consumers

Published

4 years ago

2021/12/17

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.

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Business

Prudent policy adjustments could help manage a local growth rate drop – CBSL Governor

Published

22 hours ago

2026/05/27

Sahan Weerasooriya

Dr. Nandalal Weerasinghe: ‘Growth drop manageable’.

‘Sri Lanka recorded a growth of five percent or more but due to the Middle East crisis this growth rate could be expected to drop. However, this decline could be managed effectively through the adoption of prudent policy adjustments, Central Bank Governor Dr. Nandalal Weerasinghe said at the monthly CBSL monetary policy review meeting. The meet was held at the CBSL head office in Colombo yesterday.

The Governor said that the CBSL had decided to increase the Overnight Policy Rate (OPR) by 100 basis points, bringing it to 8.75 percent.

Following this adjustment, the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR), which are linked to the OPR, have been increased to 8.25 percent and 9.25 percent, respectively. The decision comes after a careful evaluation of evolving domestic and global macroeconomic conditions, Dr Weerasinghe explained.

Dr. Weerasinghe added: ‘The tightening of the monetary policy stance is primarily driven by mounting inflationary pressures. Heightened geopolitical tensions in the Middle East have kept global commodity prices, especially petroleum, elevated.

‘This has led to sharp upward adjustments in domestic energy prices, pushing Sri Lanka’s year-on-year headline inflation to 5.4 percent in April 2026.

‘While the recent spike is largely supply-driven, strengthening domestic demand, evidenced by continued credit expansion, credit-driven imports and robust economic activity—has further accelerated short-term inflation expectations.

‘The external sector has also faced amplified headwinds in recent weeks. A widening merchandise trade deficit, driven by increased fuel import costs and a slowdown in tourism earnings, resulted in a modest external current account surplus for the first quarter of 2026.

‘Additionally, speculative activities led to notable depreciation pressures on the Sri Lankan rupee, though conditions have since stabilized. Despite these pressures and ongoing foreign debt servicing, Sri Lanka’s Gross Official Reserves stood at a resilient USD 6.8 billion by the end of April 2026, a figure that includes a swap facility from the People’s Bank of China.

‘Looking ahead, headline inflation is projected to remain above the Central Bank’s target of 5 percent in the near term before stabilizing.

‘To counter potential second-round effects on inflation from energy price hikes and unchecked private sector credit growth, the Board deemed a restrictive policy stance necessary to maintain long-term domestic price stability. Upcoming multilateral inflows and government stabilization measures are expected to support the external sector and we will continue to monitor incoming data ahead of the next scheduled monetary policy review on July 22, 2026.’

By Hiran H Senewiratne

Business

New Tilapia processing centre opens economic frontiers for Northern women

Published

22 hours ago

2026/05/27

Sahan Weerasooriya

At the opening ceremony of the Tilapia Fish Semi-Processing Centre in Iranamadu, Kilinochchi (L-R) Haridas Fernando, Group Manager – Agribusiness, Cargills Ceylon PLC; Ms. Joni Simpson, Director, ILO Country Office for Sri Lanka and the Maldives; Tormod Nuland, Second Secretary (Political Section), Embassy of Norway to India, Sri Lanka and Bhutan; Thomas Kring, Chief Technical Adviser, ILO Country Office for Sri Lanka and the Maldives; and Ms. Akanksha Khullar, Programme Officer, Embassy of Norway to India, Sri Lanka and Bhutan.

A new tilapia culture-based production and semi-processing centre launched in Iranamadu, Kilinochchi, is expected to boost climate-resilient aquaculture, strengthen rural livelihoods and create sustainable employment opportunities for women in Sri Lanka’s Northern Province.

The facility, launched by the International Labour Organization in partnership with Cargills (Ceylon) PLC and supported by the Government of Norway, is being hailed as a significant milestone in inclusive economic development and inland fisheries advancement.

Located in the Iranamadu freshwater fisheries hub, the centre has been established under the ILO’s Promoting Advancement of Vulnerable Persons and Enterprises (PAVE) Project, aimed at promoting climate-resilient livelihoods among vulnerable communities, particularly women and persons with disabilities.

Speaking at the launch, ILO Country Director for Sri Lanka and the Maldives, Joni Simpson, said the initiative demonstrated the power of partnerships in advancing social justice and decent employment.

“This processing centre represents what can be achieved when communities, government, development partners and the private sector work together. It contributes not only to strengthening aquaculture value chains but also to expanding access to decent and productive employment, especially for women and marginalized groups,” she said.

The centre is expected to generate new jobs in fish handling, processing and quality assurance while providing training in food safety standards, value addition and enterprise development. Officials said this would significantly increase women’s participation in the aquaculture value chain in the Northern Province.

Representing the Norwegian Government, Tormod Nuland said Norway’s continued support for livelihood projects in the North reflected its commitment to gender equality, inclusivity and climate resilience.

“Illustrating the success of long-standing cooperation with the ILO, the new tilapia processing unit is a key initiative that will help strengthen socio-economic conditions for communities in the Northern Province,” he said.

Cargills officials noted that the project marked the company’s first major venture into inland fisheries development after years of engagement with agricultural and dairy farming communities in the North.

Group Manager Agribusiness at Cargills, Haridas Fernando, said the company saw immense potential in developing the tilapia industry as an affordable and nutritious protein source for Sri Lankan consumers.

“We are pleased to partner with the ILO on this important initiative to support the inland fisheries sector while strengthening livelihoods for small-scale fishing communities,” he said.

The initiative also strengthens market access for the Iranamadu Freshwater Fishermen’s Cooperative Society by linking smallholder fisher communities with private sector markets and national retail networks.

Officials said the project would continue under the ILO’s Generating Resilient Opportunities for Work (GROW) programme, funded by the Governments of Australia and Norway, with the aim of expanding climate-resilient and market-oriented livelihood systems across the Northern Province.

The GROW project builds on more than a decade of interventions under the ILO’s Jobs for Peace and Resilience Programme and focuses on sustainable employment creation, private sector partnerships and social empowerment for vulnerable communities.

By Ifham Nizam

Business

Bourse indices dip as West Asian tensions continue to simmer

Published

22 hours ago

2026/05/27

Sahan Weerasooriya

As West Asian tensions continued to simmer, the All Share Price Index moved down by 189.63 points, while the more liquid S&P SL20 went down by 36.97 points.

Turnover stood at Rs 4.93 billion with four crossings. Those crossings were: Softlogic Life Insurance 33.8 million shares crossed to the tune of Rs 3 billion at a per share value of Rs 92, HNB 316,889 shares crossed for Rs 125.2 million; its shares traded at Rs 395, HNB (Non-Voting) 318,199 shares crossed to the tune of Rs 105 million; its shares sold at Rs 330 and Lanka IOC 200,000 shares crossed for Rs 27.7 million; its shares traded at Rs 138.50.

In the retail market companies that mainly contributed to the turnover were; LOLC Holdings Rs 116.5 million (207 900 shares traded), Softlogic Life Insurance Rs 112.3 million (1.2 million shares traded), Commercial Bank 78.2 million (380,000 shares traded), Overseas Reality Rs 64 million (1.3 million shares traded), Sampath Bank Rs 48.9 million (340,000 shares traded), CIC Holdings (Non-Voting) Rs 46.5 million (1.7 million shares traded) and JKH Rs 46 million (2.3 million shares traded). During the day 94.3 million share volumes changed hands in 22097 transactions.

It is said that 75 percent of the turnover came from Softlogic Life Insurance which amounted to more than Rs 3 billion. Therefore, the Insurance sector led the market while the banking sector, especially Commercial Bank and HNB, performed well.

Main contributors to the ASPI were DFCC Bank (up 0.75 percent at Rs 135.00 ), Lanka Ashok Leyland (up 7.38 percent at Rs 3,050.00 ), and Tokyo Cement Company (Lanka) (up 2.00 percent at Rs 92.00 ).

Hayleys (down 1.78 percent at 234.00 rupees), Melstacorp (down 0.53 percent at Rs 186.25 ), Sunshine Holdings (down 3.49 percent at Rs 30.40), LB Finance (down 3.44 percent at Rs 161.25 ), and Dialog Axiata (down 1.25 percent at Rs 39.40 ) were top negative contributors.

Lanka Ashok Leyland announced a first and final proposed dividend of Rs 30 per share for the financial year ended March 31, 2026.

The Lighthouse Hotel has also declared a final dividend of Rs 3 per share for the financial year ended March 31, 2026, subject to shareholder approval at its Annual General Meeting on June 30, 2026.

Yesterday the rupee was quoted at Rs322.00/323.50 to the US dollar in the spot market , stronger from Rs 325.50/327.00 the previous day, dealers said, while bond yields were quoted higher following the rate hike.

The telegraphic transfer rate for Sri Lanka’s rupee against the US dollar was 321.50 buying, 330.50 selling.

By Hiran H Senewiratne