Little price hikes add up to one big hole in pocket

WHEN it comes to price increases, the consumer is always at the losing end because what goes up hardly ever comes down.

In a free market when prices are determined, to a large extent, by supply and demand, the supplier always has the upper hand.

For some products, for example electronic items like broadband TV, prices do come down progressively because of newer models and technology updates. But these are products that are still considered as non-essentials except for those in the middle to upper classes who are more than happy and able to pay for bigger and better products.

To the ordinary consumer struggling to make ends meet, it is the price increases on essential items here and there that hurt the most.

Take stationery items where prices are expected to go up by 20% to 30% within the first quarter of next year.

The industry players have claimed that they are revising the prices, partly due to the increasing costs from the implementation of minimum wages and transport costs.

Other factors include the new electricity tariff rate, higher fuel price and the currency exchange rate between the ringgit and China renminbi, as most of the imported stationery items are from China.

And for good measure, they even add in the speculated increase in toll rates and the implementation of the GST in 2015.

Actually, the market for stationery products is not as small as we perceive.

Products like paper, clips, staplers, markers and board dusters are still very much used in offices, schools, institutes of higher learning and homes.

The paperless office is still a dream, even in the most environmentally-conscious country in the world.

In an immediate response, Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Hasan Malek has warned the Federation of Stationers and Booksellers Association of Malaysia, which represents these industry players, that they will face action under the Competition Act 2010 should they increase prices as they like.

The Star Says.

Read more @ http://www.thestar.com.my/Opinion/Columnists/The-Star-Says/Profile/Articles/2013/12/29/Little-price-hikes-add-up-to-one-big-hole-in-pocket/

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