(Sarath Wijesinghe President’s Counsel (LLM International Law (UCL))

(Sarath Wijesinghe President’s Counsel (LLM International Law (UCL)), former Ambassador to UAE and Israel, President Ambassador’s Forum, Former Chairman of the Consumer Affairs Authority, Solicitor England and Wales and former Secretary General Bar Association of Sri Lanka (LLM (UCL), assisted by Suchithra Withanage (LLM (UK) (LLM (UK|Reading) LLB (Hons) (UK))

Price Wars

Price wars are rampant when there is competition and during a sound business environment. The business environment in Sri Lanka is not sound and satisfactory – yet price wars are prevalent in consumer items that are essential to daily life and the food basket. Price wars can be seen in sales conducted to get rid of unsold stock all over the world in competitive businesses. The business environment is satisfactory when there is money circulation, proper income and an expenditure to suit your income. Citizens in Sri Lanka are going through the most difficult era in all respects, yet the massive crowds on the road during the festive season have shown that Sri Lankans are resilient to any adverse situation and are capable of fighting back with confidence. No society is ideal and utopian, and we feel sorry for the downtrodden with little to no income. Obviously, some traders are selfish and work for maximum profit when consumers are inactive and disorganized. New Year rituals appear to be followed to the rule supported by media presenters with utmost talent. No price wars are seen in monopolized consumer items such as gas, fuel, and consumer items in short supply. In the rush, the underworld and crime are rearing their ugly heads and emerging fast with sporadic and organized crimes, mostly connected to the drug menace. Price wars on eggs are seen when they are essential and required for daily life as the cheapest food item for protein for the body, demanding sufficient food especially for young people and elders. Politicians appear to be sidelined and hidden, in fear of unseen and unexpected treatments from frustrated citizens in the forefront, leaving politicians in the backyard. Even on Oxford Street in the United Kingdom, price wars are said to be still active as in any other festive season.

The Egg Basket has Fallen

The egg basket has fallen and is empty today due to the mismanagement of governance and fierce competition on eggs. Eggs were one of the cheapest sources of protein for citizens in the 1980s when business was flourishing with 25,000 farms collecting 3.2 billion eggs, filling 19% of the nation’s GDP as one of the most successful agriculture projects. The aim was to expand overseas with the backing of governance and the private sector, but this has been drastically destroyed due to mismanagement and lack of vision for the industry based on inefficiency and corruption. 200 million was spent on developments until the country was self-sufficient in eggs and chicken. The annual requirement of eggs for the country is 2.9 billion, which is around 6% of GDP. 6.3 million eggs were required for a population of 21 million, but many are not productive go-getters and await governance to import provisions from overseas, which is convenient and easy living they are trained for. Due to the import of eggs, production dropped from 80,000 to 35,000 and many gave up the business due to shortages of maize water and assistance they previously received. The Governance decided to import one to three million eggs from India from a credit line to meet demand during the Christmas season, thereby destabilizing the sound and smooth flow of egg production in the country with savings for much-needed dollars. There are lessons to be learned from this episode on eggs that has established and disturbed the smooth flow of the poultry industry on the proper track for so long with substantial national income and foreign exchange due to lack of vision and management by governance ignorant of reality and morality.

Legal Basis of Pricing and Price Wars

The system of traditional price control was done away with after the introduction of the Consumer Affairs Authority Act number 9 of 2003, which replaced the Control of Prices Act no. 1 of 1987. Consumer items are no longer required to be price marked as before. Today, the price of consumer items is required to be exhibited (article 26) while maintaining quality (Section 7 (a, b, c, and d)). Yet in certain circumstances, a maximum price can be imposed when the Minister is of the view, based on research by the CAA, that a named consumer item needs to be given a maximum price in the interest of the consumer. It is on this basis that the maximum price of eggs was determined and a court order was made to change it, which is in the news. There is a series of case law in Sri Lanka pertaining to this subject. Consumers do not appear to understand this properly, and consumer and activist organizations are inactive in helping consumers – a pity. It is a sorry affair that traders are exploiting consumers and making exorbitant profits. In the rush, the CAA is imposing heavy fines, discouraging and damaging trade practices against the CAA Act which is bound to protect both consumers and traders as stated in the Act: and whereas the government of Sri Lanka is also desirous of promoting competitive pricing wherever possible and ensuring healthy competition among traders and manufacturers of goods and services.” They need not be considered an enemy of the citizen – rather, ‘a friend indeed’ who is required for economic prosperity. In that context, the imposition of a heavy fine is grossly disproportionate as what is required and expected by the Act is to educate the consumer and relevant parties such as traders, manufacturers and regulators elucidated in Section 8 of the Act under the functions of the CAA.

Cost of Living, Price of Consumer Items and Price Control

The cost of living is not static anywhere in the world. Despite the Bread Ordinance and other legislation, the price of bread is ever-increasing worldwide. Bread that was Rs. 3.30 has risen to Rs. 77.37 today approximately. Such prices increases are common in the United Kingdom as well, where bread in 1970 that was around 60p has risen to one pound today (also approximate figures). In the United Kingdom, the income is with buying power unlike in Sri Lanka where inflation has risen to high figures with inflation on food items around 41% and the rupee value has drastically fallen down to the bottom. There may be citizens dying of starvation, and yet the news on the media is less focused on the subject than on other trivialities. One should know and practice when, where and how to purchase consumer items of their need. For example, an apple you purchase for £1.50 at Selfridges could be purchased from a roadside for 15 pence if you are vigilant and careful enough to be an alert consumer with education on consumerism backed by consumer organizations, the guardian of the consumer. When consumer items are in abundance, you should know how to collect and preserve them. Extravagance should be avoided and a simple life should be practiced. Today in a Sri Lankan family, income is spent on mobile phones, tuition and extravagance that should be curtailed. Sri Lankans are going through a hard time and it is our duty to help others and each other in beating the cost of living by acting in the interest of humanity towards others who need help and assistance. The best way to beat the cost of living is by practicing a simple life and simplicity in all respects. A classic example is the living style of a villager, within their means with no debts or mortgages. It may appear prima facie difficult but if practiced, it can be pleasant, helpful and entertaining as well.

Writer can be reached on 0094777880166|0094766280166 |sarath7@hotmailco.uk | sarathdw28@gmail.com