The Global Effects of Rising Prices What Can

The Global Effects of Rising Prices: What Can We Do? The Role of Consumer Council in the Current Environment Panel Discussion Organized by the Economics Association of Fiji; Monday 28 July By Premila Kumar Consumer Council of Fiji

Talking Points ¢ How inflation is affecting consumer’s standard of living ¢ Role of the Council in the current environment

High Rates of Inflation leads to decline in the value of money because we have to pay more and more for the same goods and services ¢ Soaring food and fuel price rise has played havoc with household finances ¢ consumers can no longer live with in its income ¢

Consumers Feeling the Pinch ¢ Weekly supermarket bill is getting bigger while the trolley load is getting smaller ¢ Salary/Wages remained fixed or others taking half pay as a result of reduced hours or facing 2%pay cut ¢ Consumers savings (if any) is eroding

All in All ¢ Consumers are suffering because any increase in importation, production, distribution and retail costs of goods and services are passed down to the consumers.

The Role of the Council in the Current Environment ¢ ¢ the Council l Provides external pressure as a watchdog to create a fair and just delivery of goods and services l represents and protects the rights and interests of consumers by identifying and articulating the policy issues that are of importance to them. l conducts rigorous research and policy analysis on key consumer issues In regard to world food price increase, the Council engaged in several activities for Government

Push for Reforms and Policy Change ¢ Conducted research to establish the increase in price of food from July 2006 to July 2007. ¢ The Council released the result calling the government to act by reducing duty and VAT on essential food items.

Push for Reforms and Policy Change ¢ Submission to the National Budget Consultative Process seeking for policy changes in key areas to alleviate hardship on the consumers. Rising cost of living is on the agenda. ¢ Made submission to the Government to control the price of LPG. This was done in 2007 and finally PIB has issued 14 days intention notice to the traders ¢ Unfortunately prescription drug is not under PIB radar and cost of other drugs are extremely high. For example the price of insulin has shot up over the years. It costs around $25 for a vial that lasts barely 2 weeks.

Push for Reforms and Policy Change Effective Use of Government Supplies (GS) ¢ Only 25, 286 families receive assistance ¢ Opening the door of Government Supplies for the disadvantaged consumers to purchase essentials at subsidised rate

Inflation Rate Understated ¢ inflation rate is calculated by using the old basket of goods and services which do not truly represent the current consumer spending. ¢ Basket 14 years old: affects the inflation analysis and forecast both technically and fundamentally

Omission ¢ The new items not reflected in the current basket of goods and services are: l l l ¢ the mobile phones, second-hand motor vehicles, new pharmaceuticals, CD Players, digital camcorders, ipod, home theatre system, digital cameras, microwave, computers, courier charge, internet charges, pay TV channels, money transfer charges Under stationery only two newspapers are shown.

In Principle…. ¢ ¢ ¢ There is greater probability that the value of inflation is distorted. It is therefore important to revise the basket of goods and services to eliminate distortions for effective policy intervention. The Council believes the inflation rate is running in double digits. Put simply, if inflation stands at 6. 9 per cent in June 2008, a basket of goods that cost $100 in June 2007 a year ago would now cost $106. 90. ie increase by $6. 90 Unfortunately consumers are forking out more.

Rice Prices Product 06 JAN 07 08 JUN % 06 - 08 10 KG RICE FMF $10. 99 $11. 90 $17. 99 39% SUNRISE PREMIUM LONGRAIN 10 KG PUNJAS $10. 99 $11. 90 $23. 95 54% LONGRAIN RICE ¢ ¢ ¢ FIRCA should check to verify that new shipment has entered the country that could validate the traders’ claim of high landing costs. As of 2006 the price of FMF packed rice increased by 39% While Punjas rice increased by 54%.

Fuel Prices 06 07 08 % change Diesoline 1. 60 1. 65 2. 05 22% Duty 18 c 18 c + + + Vat Vat

Basic Food Prices Basic Food Items 06 07 08 % change Red Cow 500 g Powdered Milk 3. 66 5. 28 5. 78 36. 68 Punjas Tea Leaves 200 g 1. 50 1. 46 1. 61 6. 83 FMF Flour 4 kg 3. 55 3. 91 5. 66 37. 28 Punjas Rice 5 kg 5. 30 6. 01 9. 27 42. 83 Punjas Cooking oil 750 ml 1. 83 2. 56 2. 83 35. 34 Tin Fish Ocean 425 g 1. 26 1. 32 1. 56 19. 23 Potato 0. 97 1. 14 1. 47 34. 01 Total Qty 1 kg 18. 07 21. 68 28. 18 38. 88% ¢ An increase of $10. 11 just for 7 items which a 38. 88% increase.

Non- Food Items Qt 06 y 07 08 % Toilet paper 1 0. 88 0. 89 1. 37 36% roll Bathing Soap 1 0. 79 0. 80 0. 93 15% pkt Washing 1 2. 23 2. 98 3. 39 34% soap pkt

Cooking Gas Prices Item 06 07 08 Fiji Gas 13 kg 37. 50 41. 00 Blue Gas 13 kg 37. 50 41. 00 37. 50

Regular surveillance of the marketplace ¢ The Council conducts price survey to keep a tab on the market behaviour and pricing ¢ Fiji is experiencing food shortages ( rice, sharp, salt and milk) which is created sense of insecurity amongst the people. This situation is further abused by the unscrupulous traders who tend to hoard or sell product as conditional item. For example one can only buy salt provided he or she has spent $30. 00 in the shop. ¢ Hoarding fuel is a common knowledge. ¢ Expensive rice (Punjas ) sold first by removing FMF Rice which was cheaper.

Create awareness to deal with high cost of living ¢ ¢ Eat at Home Dining out is an expensive proposition Shop With a Plan If you stumble around the grocery store and fill your cart with everything that catches your eye, chances are you will spend a lot more money that you needed to spend. To minimize your cash outlay, prepare a shopping list before you leave home. Plan your meals for the week ahead, and make careful note of what you need to buy in order to prepare those meals. Once the list is made, purchase only the items on the list, and avoid impulse buys

Create awareness to deal with high cost of living ¢ Eat Before You Shop When you are hungry and you walk into a building full of food, there's a high likelihood that you are going to fill you cart with unnecessary and expensive purchases that appeal to your taste buds. To keep your costs down, eat first and shop on a full stomach. ¢ Shop Without the Kids Hungry, tired, cranky kids increase the amount of time it takes to get your shopping done. Every extra minute that you spend in the grocery store increases the likelihood of extra items finding their way into your cart, including toys and snacks designed to keep the kids quiet while you try to focus on finding a few bargains

Create awareness to deal with high cost of living ¢ Buy in Bulk buying can save you a significant amount of money. Pay attention to the prices and pick up the family size package if the per-unit cost is lower and you have a place to store it. ¢ Compare Prices and Stores Some consumers have trouble calculating the cost per unit in their heads, but it's something that gets a lot easier with practice. You can even carry a calculator. Looking at the brands and comparing prices is an easy way to shave a few cents off most purchases.

Create awareness to deal with high cost of living ¢ ¢ Shop Infrequently Reducing the number of trips that you make to the store each week or month reduces the odds of unnecessary purchases, and minimizes the amount of gasoline spent getting there. Check Your Bill Electronic scanners make the shopping experience faster and more convenient, but scanners aren't perfect. Be sure to take a look at the receipt to make sure your discounts were taken into account.

Create awareness to deal with high cost of living Grow your own vegetables/fruits ¢ Eat local produce. Try to avoid imports ¢ Car pooling ¢ Switch to energy saving lights and appliances ¢

Ending remarks ¢ As some of you may realise, under the CCF Act we do not have the powers to enforce legislations but as a watch dog we do our best to safeguard the interest of our consumers by raising issues