Ministry cracks down on price gouging
Some 15 per cent of Samoan retail stores were found to have defied price controls set by the Ministry of Commerce, Industry and Labour (M.C.I.L.), random inspections have revealed.
The state of emergency imposed last year led to the return of price controls with the aim of preventing businesses from unreasonably profiteering from the pandemic and consumers potentially panic buying.
The Ministry’s annual report for the 2019/2020 fiscal year found breaches at 202 stores when inspections were carried out across the country.
Price controls were imposed on essential basic and daily food items.
“Copies of the [orders] were distributed to all traders in the country,” the Ministry said.
“All traders were strongly advised to comply with the stipulated prices and display [price orders] for ease of the public’s access to price information.”
But of the 202 shops at A’ana, Tuamasaga, Faleata, Vaimauga and Anoama’a districts subject to spot inspections some 85 per cent of traders were found to be complying with price controls.
“And 15 per cent were non-compliant and were issued verbal reminders and warnings as corrective notices,” the Ministry’s report concluded.
The Ministry is continuing to monitor variations in prices and says it has also received complaints from consumers about alleged price gouging by retailers.
“The highest number of complaints fell [in] the overpricing category,” the report said.
“These overpricing complaints lodged by consumers regarding high prices charged by traders as opposed to stipulated prices in the [price order] for items such as sugar, rice and chicken [legs].
“There were also the complaints relating to customers’ claims for refund, misleading conduct, faulty second hand cars and unsatisfied services.”
The Ministry said that all the complaints were resolved within the fiscal year concerned.
“The majority were resolved on the spot while others were investigated and taken through to the conciliation process,” the report said.
The Ministry said the enactment of the 2016 Competition and Consumer Act led to a rise in consumer complaints to amend or repeal the system of price ceilings.
“Government policy and supporting legislation regarding price controls, therefore, need to be reviewed and recommendations made for change that consider the economic cost-benefits of existing policy, comparative evidence from economies of a similar size and structure to Samoa, and stakeholder views,” the report said.
“With funding from the Samoa Governance Support Programme (S.G.S.P.) in July 2019, public consultations with stakeholders including the private sector and some of the Government Ministries were held to collect information.
“[Aspects considered included] the potential impacts of the policy on consumers, the business environment & trade performances and competition in the face of international and Samoa’s domestic market and the economy.”
Further, the outcome report identified potential gaps in consumer law and recommended that consideration be given to amending it to prevent unfair business [practices].
Among the reforms suggested by the Ministry were new treatment of the informal sector, stamping out undeclared business activity such as tax evasion, and even the introduction of new price ceilings to ensure food security.
Plans to establish a national Consumer Council were placed on hold due to the COVID-19 pandemic, the report said.