19 Feb 2014 12:10pm
WINDHOEK, 19 FEB (NAMPA) - The Namibia Competition Commission (NaCC) has been tasked by the Ministry of Trade and Industry to verify actual cost structures and production levels as well as monitor retail prices in the country.
Trade and Industry Minister Calle Schlettwein said when the National Assembly resumed in the capital on Tuesday that his ministry has also asked the NaCC to monitor farm gate or ex-factory prices, or prices at which goods are sold by farms and at factories.
The directive came after concerns were raised by members of the public that local industries which have been granted Infant Industry Protection (IIP) have increased the prices of the goods they manufacture.
Schleittwein noted that increases in costs have been passed on to retailers, who in addition to their profit margins also pass them on to the end- consumers.
While I can understand the rationale behind such cost increases, I believe we should not tolerate prices to be determined by domestic produce simply on the basis of the cost of imported products, he reasoned.
Schlettwein also stated that the ex-factory price for whole chicken was indicated to the ministry as N.dollars 31 for 1.5 kilogramme, while the retail price for the same whole chicken for consumers ranges from N.dollars 45 to over N.dollar 60 in some instances.
This translates into mark-ups of between 50 and 100 per cent, and this appears to be excessive and not in the interest of consumers, he stressed.
The Trade and Industry Minister, therefore, noted that they plan to develop a Retail Charter for Namibia, in cooperation with a number of stakeholders to increase transparency in price composition.
We recognise that protection measures should be temporary and targeted, and should not be excessive or permanent, said Schlettwein.
IIP measures are also only imposed for a defined period. These IIP measures have indeed enabled the development and survival of certain manufacturing industries.
IIP was found to be necessary to impose restrictions on the quantities of imports and specified poultry products and dairy products in order to safeguard local value-chains from import surges, and to prevent or reduce the risk of job losses and related socio-economic negative effects.
It was created in 2012 to benefit the local economy.
IIP is meant to accelerate job and wealth-creation, and to equalise wealth-distribution by cushioning and creating policy space for existing economic value-chains to get off the ground and build the requisite competitive capacity.