Cost of Living: Targeted Price Reductions on Essential Goods Anticipated

The promises made by the Minister of Commerce now face the harsh scrutiny of reality. Last Tuesday, within the hallowed halls of the National Assembly, the Minister provided an initial assessment of the government’s programme. Some measures are already in effect, while others are set to be rolled out in the coming months. Yet, the roadmap remains shrouded in ambiguity. In the face of soaring prices, the government is striving to regain control.

The Minister of Commerce has unveiled a series of initiatives designed to curb the rising cost of living and better regulate certain markets.

However, the clarity of public action remains inconsistent, caught between measures already initiated and those still in the pipeline.

E-commerce Regulation

Among the measures the government intends to implement in the forthcoming weeks is the regulation of online commerce.

Approximately 2 weeks ago, a consultation meeting convened with key stakeholders in the sector—the Association for the Protection of Consumers of Mauritius (Acim), the Chamber of Commerce and Industry, and the General Retailers Association (GRA)—marking the commencement of a long-awaited reform.

A regulation is currently in the works, aimed at imposing a stringent legal framework on e-commerce activities, a burgeoning sector that remains largely unregulated.

“The objective is to better regulate the practices of online merchants, enhance transparency, and protect consumers.

Mandatory permits, verifiable contact details, and traceability: the new rules should put an end to certain excesses.

The draft is expected to be presented to the Council of Ministers in the coming days,” declared Minister Michael Sik Yuen.

Maximum Mark-up Adjustments

Reliable Defi Media sources indicated that the Ministry of Commerce plans to approach the Ministry of Finance to adjust the mechanism of the “maximum mark-up,” capping commercial margins.

Price reductions are anticipated on certain staple products, particularly canned vegetables and frozen goods.

Since 24th February, these items have been subject to price controls following a market analysis conducted by the Ministry of Commerce, which revealed significant inflation: a staggering 18.6% increase on frozen vegetables and a 3.4% rise on canned goods in 2024.

In a statement, Minister Michael Sik Yuen assured that there are no obstructions, yet emphasised that these measures require time.

A study is currently underway, examining both the local market and import channels.

The State Trading Corporation (STC) is on the hunt for unbeatable prices on oil. The Ministry is also anticipating a reduction in the prices of margarine and table salt.

Essential Goods

In the months ahead, the government plans a series of targeted price reductions on essential goods.

In its sights are medical equipment, including wheelchairs, hospital beds, and other assistive devices, which are expected to see their prices revised downwards.

The aim is to alleviate the financial burden on families grappling with illness or disability.

Another sector poised for intervention is the automotive industry, with a reduction in the cost of tyres also under consideration.

These measures are anticipated to be included in the next budget cycle, as the government seeks to navigate the turbulent waters of economic hardship faced by its citizens.

Inflation: Calls for Urgent Action as Prices Soar

As inflation continues to bear down heavily on households, the clamor for more robust state intervention grows ever louder.

Jayen Chellum, Secretary General of the Association for the Protection of Consumers of Mauritius (Acim), has pointed an accusatory finger at the lack of effective regulation, which he believes is the root cause of the skyrocketing prices of certain goods.

He argued that the previous government allowed a laissez-faire approach, enabling merchants to set their prices freely, often to the detriment of the consumer.

This unchecked pricing freedom, coupled with a weak culture of price comparison among consumers, has paved the way for excessive increases, particularly on unregulated staple items such as fresh vegetables.

“Today, while some prices are decreasing, the overall trend remains upward,” observed Chellum, who is calling for stricter regulation on goods that are in a near-monopoly situation, such as chicken, fish, eggs, and processed bread sold in supermarkets.

However, the inertia is not solely political. Consumers themselves, often unwittingly, play a role in this troubling dynamic.

“Many remain attached to their shopping habits, failing to seek alternatives even as prices rise. This loyalty can be costly,” warned Chellum.

The State Trading Corporation (STC) has reminded the public that several essential products are already subsidised, including fuel, household gas, rationed rice, and white flour.

Other items, such as milk, oil, and split peas, are imported but in limited quantities. An expansion of this list would hinge on a clear political direction.

In this context, the notion of reverting to public import mechanisms, akin to those established under the previous government with the Smatch brand, has resurfaced.

Minister of Commerce Michael Sik Yuen recently broached this possibility, while also highlighting other potential levers: capping profit margins, targeted subsidies, or reducing taxes on certain everyday consumer products. “Everything will depend on the Budget,” Chellum noted.

Yet, this approach is far from universally accepted. Suttyhudeo Tengur, President of the Association for the Protection of the Environment and Consumers (Apec), has taken a more confrontational stance.

He severely criticized the ineffectiveness of current structures and highlights the delays plaguing institutions such as the STC and the Agricultural Marketing Board (AMB).

“These organisations are out of their depth. They no longer respond to market realities or consumer expectations,” he asserted.

According to Tengur, a profound reform is imperative. He advocated for a structural and strategic overhaul of these entities, arguing that such a move requires genuine political courage.

“Rethinking their operational methods is not an option; it is a necessity,” he insisted, as the nation grapples with the relentless tide of inflation.

Source: Defi Media