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Cost of Living IV

We are pleased to note that the public has the highest expectations from the Consumer Affairs Authority. In other countries, similar organisations are very powerful and organised.

The present piece of legislation, which is Act No. 9 of 2003 came into force on 17.03.2003 replacing the Consumer Protection Act, the Fair Trading Commission Act, the Control of Prices Act and the connected Regulations.

Previously, there were Price Control Inspectors who were responsible for implementing the Government Regulations on prices which are specified. under the present set up only five items are price controlled. The five items that are price controlled come under regulatory powers of the Consumer Affairs Authority implemented with the concurrence of the Minister.

The price control mechanism is exercised by indirect means under regulatory powers and also by other methods enumerated in the Act. The Traders are compelled to mark the price, maintain standards, issue a proper receipt and also comply with the directives of the Authority.

In a free economy, a trader has the freedom to sell an item for the price he chooses. But it should not be extremely excessive.

In such circumstances, the public should bring it to the notice of the Consumer Affairs Council which is another limb of the Consumer Affairs Authority acting independently under a Chairman and the Members appointed by the Minister.

The mandate of the CAA is very complex and demanding. Its primary duty is to provide better protection to consumers through regulations of trade and prices of goods and services. At the same time, it has to protect traders and manufacturers against unfair trade practices and, reasonable trade practices.

This is an enormous task, and a complex balancing exercise in a free economy where traders and consumers have the freedom. In other countries, the public and other organisations play a major role in this process. In India an aggrieved citizen can go before the court for redress in consumer affairs. In Sri Lanka the direct access is through the Consumer Affairs Authority, which has unrestricted regulatory powers.

The Consumer Affairs Authority and the Ministry of Trade are seriously considering changes in the legislation for immediate and far-reaching remedies for the consumers who are at the receiving end due to the escalation of prices.

The Consumer Affairs Authority is conscious about the civic duties and obligations.

We publish three full-pages for consumers in Sinhala, Tamil and English. On Monday in the Thinakaran, Tuesday in the Dinamina and on Thursdays in the Daily News through which we are carrying on a continuous dialogue and educative programmes for Consumers and Traders. It is difficult for us to implement the international spirit of the legislature all alone. We need your support, your suggestions and co-operation.

We invite you to organise yourself by forming Consumer Associations through which the Consumer Affairs Authority can share power and to work together to achieve the goal to protect consumers against the making of the goods or the providing of services which are hazardous to life and property of the consumer.

We have an ambitious target to set up Consumer Associations in every village. We are publishing the format of the application and the form for you to get organised and to register with us in order to help you.

Please do not consider the CAA as a panacea to bring down the cost of living. If we work together, we are bound to achieve our goal to help the needy consumer!, staes Sarth Wijesinghe, Chairman, Consumer Affairs Authority.

Questions and Answers

Q: What are the reasons for the rise in oil prices?

A: Higher demand and pressure from fast growing economies. This applies to emerging giants of the world economy, China and India and supply constraints in oil producing countries. Adverse weather conditions caused supply disruptions. The unsettled political condition in the Middle East has also contributed to this factor.

Q: What are the typical effects of higher oil prices?

A: If prices continue to climb importers have to spend even more to get the required oil supplies. Such spending has negative consequences for economic growth, and it increases the National debt. Of course, the consumers also feel the higher prices. High energy prices have dramatic, even life threatening consequences.

Not only (does) transportation to markets, schools and hospitals also become more expensive. The transport sector, which makes market access easier for the poor, curtails their mobility. Expensive energy therefore curtails the budding economic potential of the socially weak.

Q: What are the countries affected by the high oil prices?

A: The oil price hike essentially affects all countries that have to import oil. The extent to which that happens depends on a wide range of factors, including the degree of self sufficiency, the ratio of oil imports to GDP (Gross Domestic Product), economic conditions, access to capital market and foreign exchange reserves. Developing countries that import oil particularly will get affected due to high oil prices.

Q: What are the hopes for attaining development goals affected because of high oil prices?

A: Production in the Asian region is oil intensive; energy efficiency tends to be low. Oil tends to be the fundamental base for the industrial growth. When oil prices go up the Government tries to subsidise. Thereby the national budget that was meant for development has to be spent on energy. There will be no money or less money to spend on other issues, which are urgent from a development point of view.

Q: What are the major energy sources in Sri Lanka?

A: Biomass (47%), Petroleum (45%) and Hydro electricity (8%). The contribution from alternative energy sources such as solar power and wind power is insignificant.

Q: Is there any relationship between gas prices and increase in crude oil and other oil prices.

A: Yes. The cost of fuel is indexed to spot prices of crude oil. Thus in times of oil price hikes, the price of LPG also increases.

Q: What are the basic consumer rights?

A: 1. The right to satisfaction of basic needs: To have access to basic, essential goods and services; adequate food, clothing, shelter, healthcare, education, public utilities water and sanitation.

2. The right to safety: To be protected against products, production processes and services which are hazardous to health or life.

3. The right to be informed: To be given the facts needed to make an informed choice, and to be protected against dishonest or misleading advertising and labelling.

4. The right to choose: To be able to select from a range of products and services, offered at competitive prices with an assurance of satisfactory quality.

5. The right to be heard: To have consumer interests represented in the making an execution of government policy, and in the development of products and services.

6. The right to redress: To receive a fair settlement of just claims, including compensation for misrepresentation, shoddy goods or unsatisfactory services.

7. The right to consumer education: To acquire knowledge and skills needed to make informed, confident choices about goods and services, while being aware of basic consumer rights and responsibilities and how to act on them.

8. The right to healthy environment: To live and work in an environment which is non-threatening to the well-being of present and future generations.

Q: How does the consumer benefit from market competition?

A: Creating competition among the producers/manufacturers will bring many results like price reductions, improvement of quality of the product etc, which will benefit the consumer.

Also the competition will lead to new inventions and investment by manufacturers and suppliers.

It will also open doors for the product to go to international markets when the quality of the product improves to meet international standards.

Q: How does the CAA intervene and investigate on anti-competitive behaviour.

A: Competition promotion unit of the Consumer Affairs Authority carries out several market research/study programmes etc. to improve the quality of the products and services to the consumer. In addition to the above, the unit also conducts investigations based on public complaints which help to build up a competitive market.

Q: What power has the Consumer Affairs Authority to handle Anti-Competitive Practices?

A: The Consumer Affairs Authority has been vested with the power of a District Court including the power to - * issue notices and require the attendance of any witness, * require the production of documents or records, * administer any oath or affirmation to any witness.

Q: In case of a proven anti-competitive practice, what steps would the CAA take?

A: The Consumer Affairs Authority will take the necessary steps to stop such practices which will affect the consumer. The Authority will also take other measures necessary to avoid indirect effects on consumer by such practices.

The risk of the shopping list

Many housewives are in the habit of preparing a “shopping list” before going marketing or giving it to the husband or domestic assistant. The shopping list will have the preconceived “prescription”, which may go like this: beans, carrots, cabbage, beetroot, leeks, ladies fingers, drumsticks, tomatoes, etc. The husband or the domestic aide has no alternative but to purchase the items and in the quantities ‘prescribed’ therein whatever the market price is on that particular day.

Vegetable prices are not uniformed over long periods. Retail prices of particular vegetables could vary very widely due to being off-season, crop failure, transport breakdowns, etc. If purchases are to be made on a shopping list prepared in advance, the buyer will be an involuntary victim of extraordinarily high prices of particular types of vegetables on a particular day.

If, however, the buyer uses the discretion in buying those vegetables which are cheaper on that particular day, and postpone the purchase of other items which are expensive on that day, he or she will end up bringing home a cheaper basket of vegetables.

In the above circumstances, we can immensely benefit from dropping the habit of the advance shopping list, and develop the habit of deciding which item to buy and in what quantity, only after visiting the market place.

This discretion of course, cannot be made by the domestic aide. So, in order to optimize the expenditure on vegetables, or even for that matter on fish or fruits, the head of the household or some such responsible person should do the marketing.

There is an added indirect benefit derived from changing the variety of vegetables purchased on each marketing spree, without restricting to a habitual list. You eventually end up consuming a variety of items with varying nutrition values.

If cabbage is expensive you may switch, for a change to a different leafy vegetable, which is usually not in the traditional shopping list, but much more nutritious. We can consume pumpkin or yam when the price is low, instead of potatoes.

Drop the habit of the shopping list.

Justin Amarasingha, Director Finance, CAA

Be informed fruit vendors

Awareness programme for prevention of improper application of chemicals

Improper, unhealthy application of chemicals to fruits is a prevalent practice for quick ripening. These chemicals have the potential to harm not only the consumers who consume these products but also the fruit vendors and workers who expose themselves to these chemicals regularly while applying these chemicals.

Given the involvement of small-scale, un-organized retail sector and difficulties in detecting application of chemicals through spot-inspections, it is not practical to control these abuses through regulatory measures alone.

Therefore, the best long-term strategy is to increase the awareness among consumers, producers and vendors on harmful effects of these practices and alternative scientific methods available for ripening of fruits.

As a measure to overcome this situation the Consumer Affairs Authority (CAA) had organized a workshop for fruit vendors, importers and producers with the collaboration of experts from the Industrial Technology Institute (ITI) at the ITI Auditorium on June 9 between 2.00 and 5.00 p.m. Fruit vendors and importers from Colombo and suburban markets were invited for this workshop.

Technical experts from ITI have educated participants on harmful effects of application of chemicals, highlighting the problems that could be caused by chemicals such as pesticides and ripening agents.

Accordingly, some of the chemicals used are identified as hazardous chemicals and regular exposure to them could lead to chronic illnesses. Therefore, the scheme of ‘Good Agriculture Practices’ should be adopted beginning from the farm through market, until products reach the final destination - the consumers. Such practices help not only to improve the hygienic conditions of fruits but also to increase economic benefits by minimising post harvesting losses and damages.

Experts from ITI also introduced safe and scientific methods available for ripening fruits and demonstrated how they can be practised in a low cost manner.

They have pointed out that even when fruit vendors use such un-harmful methods, quite often the manner of application is incorrect and is usually applying them in excessive dosages.

Members of the CAA staff created awareness on participants about legal and regulatory provision available to take action against improper application of chemicals that can be harmful to consumers.

At the end of the programme, a discussion was held, which was participated by the ITI and the CAA staff and the Chief Veterinary Surgeon of the Colombo Municipal Council. Some of the pressing problems faced by fruit vendors and importers were raised on this occasion. The workshop was found to be a very useful exercise due to lively response from participants.

Some participants urged the CAA and the ITI staff to continue similar programmes throughout the country as well, so that an awareness is built among traders as well as consumers.