When Shihan Mohd Salim, who owns Anak Mami Restaurant in Kota Kinabalu, Sabah, was fined RM30,000 by the Sessions Court in 2018 for pricing iced Milo at RM3.20, it sent shock waves in the food and beverage fraternity.
He was charged under the Price Control and Anti-Profiteering Act 2011 for failing to provide full pricing details and receipts for beverages between January 2015 and March 2016.
Shihan was also accused of failing to show itemised charges for the ingredients - Milo powder, milk and ice, besides the drink’s price tag, during seven working days, the New Straits Times then reported.
Last week, the Court of Appeal allowed his appeal against his conviction and fine and perhaps it would be a timely lesson for politicians who cry “we will take action against profiteers”.
The slogan can only be described as an over-used cliché and has done little to stabilise, let alone bring down, the soaring prices of consumer goods.
Such slogans will never appease the consumers who now have to dig deeper into their pockets and for food, as there is little anyone, including the government, can do about rising prices.
In April, I wrote: A glass of tea costs RM1 in a hawker stall; RM1.80 in a kopitiam, about RM12 in a franchised café and up to RM18 for a cuppa in a five-star hotel. Which one of them is making a decent profit and which one is making a humongous yield?
I also gave another example - canned drinks. They are sold by the manufacturer at the same price - to hawker stalls, kopitiam and hotels. If the cost price is constant, the difference in the selling price is the profit.
While the hawker makes RM0.80 and the kopitiam RM1, the hotel makes a whopping RM17! Would this not come under the Act, requiring the hotel to be served with a notice?
Fixing prices
I had argued that in a free enterprise system that this country has operated, the seller is free to fix the price of his goods or services. Except for some food items which come under the controlled list during festive seasons, when ceiling prices are fixed, a businessperson has the right to fix prices as he deems fit.
As long as retailers have a price list or a menu that lists the prices of goods or under the Price Control Order (Indication of Price by Retailer) 1993, they become untouchable.
As in the case of the Langkawi restaurant which sold sea bass, the customer was told it would cost RM16 per 100g and yet went to order knowing the price.
Domestic Trade and Consumer Affairs Ministry’s Kedah enforcement chief Mohd Shahran Mohd Arshad said a notice has been served on the restaurant.
“Once we receive their response, we will carry out a detailed analysis of their costs to determine whether there was an unreasonable increase in prices,” Shahran was quoted as saying.
The latest is that the investigation papers have been submitted to the Attorney-General’s Chambers. But then, the question to be asked is: What about five-star hotels which have listed their Hainanese Chicken Rice for RM70 - almost nine-fold pricier than what is offered in restaurants?
Is it because the Joneses who patronise these hotels don’t bat an eyelid nor complain when paying such sums of RM45 for a roti canai?
The answer, of course, would be they paid for the ambience and perhaps to “be seen” at these places - but this is a moot point.
Ministry's regulations
The Domestic Trade Ministry’s website says the Price Control and Anti-Profiteering (Mechanism to Determine Unreasonably High Profit for Goods) Regulations 2016 aims to act on profiteering.
The regulation applies the mark-up percentage calculation mechanism or margin percentage mechanism on each first day of the financial year or calendar year of business as the determinant of basic profit.
The percentage is based on the mark-up percentage or margin percentage on the first day of the previous year and the trend difference of mark-up percentage or margin percentage for the period of the previous three years.
It adds: “This regulation does not set the profit rate of the goods traded or sold. However, the ministry has the basis through a mechanism in this regulation in ensuring that the profit set or gained by the sellers for such goods is reasonable, based on the previous company information data.”
So, if it is a new restaurant or outlet, this regulation cannot be enforced. Having said that, the ministry has been unable to arrest the trend of prices of food going up when taxes on ingredients are increased.
A few years ago, the price of wheat flour went up by 10 sen per kg, food outlets increased their prices of roti canai by 10 sen per piece. How will such a mechanism operate under these circumstances?
Why is the state getting involved with this when it should be an issue of caveat emptor (buyer beware)? Shouldn’t Joe Public decide what and where he should buy his goods of food by taking into account the price and the convenience?
Why are petrol kiosks and convenience stores allowed to mark up their prices by a few sen higher than the mom-and-pop stores?
No retailer would want to price his goods at the risk of losing his or her clientele but when their suppliers increase prices, they have little choice but to pass it down to the consumer.
Last week, the chief editor of the New Straits Times, Mustapha Kamil, posted on social media an interesting observation: “No matter how expensive the fish price is in the market, there are still no fishermen living in bungalows or condos.”
One cannot disagree with him on the remark that there are many who don’t go out to sea and (do all the hard work) not only occupy bungalows but drive luxury cars.
The point to note is that despite going after the poor restaurateur or a retailer who yearns to make a decent profit, the middlemen who cause price increases have never come under scrutiny.
But this has been a malaise in our system. Even our government uses middlemen instead of going to the source for the supply of goods and services.
The ministry’s officers don’t have to go far. Just go to the jetties where the fishermen’s catches are unloaded and sold and compare the prices at the end of the supply chain - in wet markets.
Perhaps then, they will get a better and clearer picture. Until then, the sloganeering and the threats will do little to bring down prices which would indeed benefit the rakyat. - Mkini
R NADESWARAN says that for prices to stabilise, the role of the middlemen must be studiously evaluated. Comments: citizen.nades22@gmail.com
The views expressed here are those of the author/contributor and do not necessarily represent the views of MMKtT.
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