The Federal Competition and Consumer Protection Commission (FCCPC) has engaged relevant stakeholders in the marketplace sector in a bid to address the rising cost of commodities in Nigeria.
Speaking at a stakeholders engagement organized by the FCCPC on exploitation pricing, the Executive Vice Chairman of the Commission, Mr. Tunji Bello said “our gathering here today is to underscore the gravity of the situation and urgency of the need that we both work together to check this unwholesome development.
“As a statutory body whose mandate is to cater to consumer rights, we cannot allow this unhealthy trend to continue. To be sure, we quite recognize that an unfavourable exchange rate has negatively impacted the cost of production in local currency.
“However, the margin in pricing of goods and services is rather unreasonable or excessive in not a few cases. We have observed, for instance, that the margin in the prices of imported goods are very disproportionate in many cases; and in the case of locally produced goods, excessively inflated.
“This is an untenable situation, particularly in the retail segment, where we have identified patterns of price fixing perpetrated by some market associations, price gouging, and other anti-consumer practices. For proper understanding, price fixing refers to an unholy agreement between competing businesses to set prices at a certain level.
“This can be done either explicitly or implicitly, and it prevents healthy competition that is otherwise expected to drive prices down and improve quality. Price gouging on the other hand occurs when sellers significantly increase the price of goods or services during a crisis or a period of economic challenge”.
He explained that “this practice takes undue advantage of the consumers. To illustrate, let me give you some glimpses of our findings. For instance, our check just two days ago at a popular supermarket chain in Texas, United States, revealed that a fruit blender called Ninja is displayed on the shelf at $89 (roughly N140,000). Just two days ago.
“Meanwhile, the same product was displayed at a popular supermarket at Victoria Island in Lagos for N944,999 on the same day and at the same hour. This represents more than 500 per cent inflation of the cost. Interestingly, when our undercover officer visited the same supermarket two weeks earlier, this same blender was on display with the price tag of N750,000. The question then arises: what is the basis for this arbitrary hike in the price of the blender compared to the United States? What business principle can justify this level of profiteering?” he questioned.
Bello stated that “It will be helpful that i cite a few more of the unpleasant discoveries we made during our investigation. in some notable supermarkets surveyed discreetly in Abuja, Kano, Port Harcout and Lagos, we also found that prices were arbitrarily jacked up from time to time without any justifiable reason.
“In one particular big supermarket in Abuja for instance, consumers were being charged N2,600 for an imported toilet soap at the payment point as the price tag was not displayed as earlier mandated by FCCPC. The same toilet soap was displayed for sale at N1,950 at a popular supermarket in Lekki, Lagos the same day. That already constitutes a double offense.
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“From our findings, the penchant to hike prices arbitrarily is also common among sellers of food items and transport operators. When the foodstuff sellers were engaged, their common response was that the cost of transportation had increased. But how justifiable is it for the tomato seller to double the price of a basket of tomatoes simply because they paid higher transport fare? Whereas the price of the same basket of tomatoes was far cheaper at another market within the same jurisdiction surveyed by our field officers.
“Now, the question: did the seller who sold at a lower price not also pay transport fare? In a typical foodstuff market environment, this is how price fixing happens. A trailer-load of yam tubers arrives Wuse market in Abuja from, say, Benue state. Rather than allow free trade, the market cartel then Insert themselves between the produce farmers and the retailers.
“They buy in large quantities from the producer at cheap rate and, in turn, sell to market retailers at much higher price. And the retailers, in turn, sell to consumers at cut-throat rate. Ladies and gentlemen, such price fixing is no longer acceptable and FCCPC will henceforth crack down on those involved in this profiteering scheme” the Vice Chairman explained.
Furthermore, Bello said in the case of public transportation, “again how justifiable is it for the bus driver to double their fare simply because they paid slightly higher for petrol? Of course, this will only result in a spiral of arbitrary hike in the prices of other services.
“The landlord who pays more for transport will probably seek to double their own rent as a survival strategy. The school-owner asked to pay higher rent will also likely increase the fees they charge students. That way, we all end up being losers with the cost of living becoming unbearable for everyone.
“In view of the current situation in Nigeria, let me however be very unequivocal. Price gouging and price fixing are not only unethical, but patently illegal under the FCCPA. Section 17 of the Act empowers the Commission to eliminate anti-competitive practices, misleading, unfair, deceptive, or unconscionable marketing, trading, and business practices.
“As such, the FCCPC has the will and the capacity to invoke the full weight of the law against those found culpable of exploiting consumers for undue profit. Under Section 155, violators whether individuals or corporate entities face severe penalties, including substantial fines and Imprisonment if found guilty by the court.
“This is intended to deter all parties involved in such illicit activities. However, our approach today is not punitive or adversarial. To start with, we intentionally resolved to withhold the names of the aforementioned errant supermarkets, believing that, after this exposition, they will turn a new leaf and adjust their prices downward to a reasonable level. This approach is borne out of our conviction that dialogue and collaboration are equally important tools in fostering a fair marketplace” he stated.
However, market Association and Unions listed a number factors beyond their control causing price rise in the market place.
Responding, Mr. Ifenyi Okonkwo, vice chairman National Association of Nigeria Traders said some of the things that are causing high pricing in the market place is due policy inconsistency by the government.
He explained that even items imported, customs will take their charges, from there police will take their own, adding that transportation is a big factor in high pricing.
Concerning farm produce, Ifenyi noted that insecurity in the country is also contributing to high food prices.
On behalf of Agricultural produce of Nigeria Mr. Solomon Igbopo lamented that Government farm inputs are not given to the farmers at the right time.
“A lot of fake farm inputs like chemicals are causing low farm yields and by extension causing price surge. Again, the middle men in the market place are also contributing to the high prices of commodities in the country”.
Others complained that multiple taxation, police checking points on highways, high cost of transportation are the factors contributing to commodities price surge in Nigeria.
They said transportation in Nigeria is very expensive, stating that by the “time you look at how much you have spent, you must increase the price to recover your money”.
The VC said he had listened to them, and would collaborate with other relevant Agencies to look for a way forward.
NIGERIAN TRIBUNE