Consumer group: Cartels, not taxes, to blame for hike in food prices

August 25, 2018


Consumer group: Cartels, not taxes, to blame for hike in food prices

PETALING JAYA: A consumer group has urged the government to go after cartels and middlemen in the country whom it says have been controlling the prices of food items for the past 25 years.

Jacob George.

The Consumers Association of Subang and Shah Alam, Selangor said it was therefore not surprised by the hike in food prices in the Klang Valley despite the recent withdrawal of the goods and services tax.

Speaking to FMT, its president Jacob George said the prices of consumable items would continue to rise as long as “the old players” remained in the system.

“The only way to curb this is to have the political will to pluck out the middlemen and cartels from the system,” he added.

George, who has been a consumer advocate for the last 40 years, claimed that the domestic trade and consumer affairs ministry was aware of the cartels’ backgrounds as their particulars were all in the system.

“They have a full database available at the push of a button. The ministry is also aware as their licences are issued by them,” he said.

“We know the importers, middlemen and retailers, and how the products are moved around nationwide including in Sabah and Sarawak.

“We know the reasons for cost escalation, the proxies involved, who the fence-sitters are who are quietly making money and who the hoarders are as well,” he told FMT.

He said the ministry was supposed to go after the cartels and middlemen just before the May 9 polls but did not due to the election.

George, who was previously part of a ministry committee, was commenting on the inflation rate measured by the Consumer Price Index which stated that food and non-alcoholic beverages in Kuala Lumpur recorded a 3.5% increase in July. This was far more than the increase measured in any other state.

The Statistics Department meanwhile said the index for housing, water, electricity, gas and other fuels climbed 2% while education increased by 1%.

George said the new Pakatan Harapan government should set up a task force comprising senior civil servants from various groups including the home ministry, Customs Department and border patrol to look into the matter.

Otherwise, he warned, the prices of consumable goods would continue to rise even after the implementation of the sales and services tax.

“We have to go after the cartels and catch them by the horns. They control the price of each product on the street,” he said, adding that it was the middlemen who made the most money.

“This has to stop.”