Friday, May 06, 2011

Price war on rice begins



DESPITE 19 brands of rice being available locally, the price of this staple has not fallen, the Independent Consumer and Competition Commission said, The National reports.

It said, instead, rice prices had risen in most urban and semi-urban households, which, in most cases, was rice supplied by Trukai Industries Ltd, the main distributor and miller.

An ICCC report stated that the declaration of Trukai's Roots Rice to be price-monitored was because that brand "is traditionally consumed by low to middle income earners and is currently the leading brand in the market".

"Any price changes would lead to price increases on other rice brands."

The report said the setup of other companies had not led to a fall in prices of the Trukai brand.

It said prices had increased to match the price imposed by Trukai.

ICCC commissioner and chief executive officer Dr Billy Manoka told the Ekonomics Society forum that the increasing competition in the rice market had not translated into falling retail prices for consumers in recent years.

He said the ICCC "is maintaining a vigilant eye for collusion among wholesalers and importers".

He said the ICCC moved away from direct price control to factory gate price monitoring of rice, flour and sugar in the mid-2000s as there was some sort of competition.

"However, competition does not appear to be working as we view that retail prices have continued to increase over recent years not withstanding falling factory gate prices for some of these products".

"The commission has commenced monitoring the wholesale and retail prices of all brands apart from the factory gate prices of the products that are milled in PNG," he said.

An online survey into 32 consumers' buying power revealed that despite being expensive, Trukai has always been the trusted brand for them (12/32) and they kept on buying it, preferring its taste and quality.

Nine respondents preferred the Trukai Jasmine rice because it is cheaper than the other Trukai brands and tasted better, offering a healthier choice to Roots Rice (8/32) while three chose to buy Brown Rice and other rice brands.

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