GOVERNMENT has admitted it has no solution to price hikes after retailers defied an order to reduce prices of basic commodities.
BY BLESSED MHLANGA
Industry minister Sekai Nzenza yesterday confirmed government was in a dilemma after some retailers completely ignored the price hike moratorium whose net effect was to get prices of all basic commodities reduced to the levels they were on March 25.
“The meeting we had with them (retailers) was quite historic, because it had not happened before,” Nzenza said.
“We came to a common understating that we are living under COVID-19 and that to continuously increase the prices was hurting the consumer. We came to an agreement.
“However, as with all agreements, you don’t always get compliance. We have done a survey very recently and we have realised that some retailers have indeed gone back to the March 25 prices, others have not changed their prices at all and others have continued to increase the prices.”
She said the only solution was to engage the private sector again to ensure compliance.
“We need to continuously engage because this agreement was done in good faith and we are basically saying, we are in this COVID-19 together, let us also consider what the impact is on the consumer,” she said.
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Economist Douglas Kanyenze said price controls won’t work because there would be a need to control the whole supply chain which was almost impossible given that “most of the suppliers are outside our borders”.
“It is always difficult because you have to control, not just the end prices, the retail prices, but you have to control the whole supply chain,” Kanyenze said.
“You already know currently the supply chain has been disrupted. Because of COVID-19, some of the supply chains are abroad and even in South Africa. As a result of lockdown in these countries, you cannot easily access raw materials.”
Confederation of Retailers president Denford Mutashu said retailers remained committed to ensuring that the moratorium announced by government is implemented and the consumers are given a reprieve.
“Retailers are still committed to the moratorium which was founded in good faith to alleviate the plight of consumers under lockdown. A common position will soon be announced that reflects the interests of all parties involved,” said Mutashu.
