Flawed price control: Shopkeepers taking undue advantage of buying sprees

Official statistics show incidents of profiteering have multiplied recently

LAHORE: As the shopping sprees of people continues, so does overcharging and profiteering across Punjab ahead of Eidul Fitr. All of this is taking place in the absence of an effective price control regime.

Official statistics compiled by the Punjab Industries, Prices, Weigh and Measure (IPWM) department show that incidents of profiteering multiplied over the past weeks shopping sprees were given a fresh impetus with Eid round the corner. Data indicates over 400% increase in profiteering incidents over the last six days. Meanwhile, economic experts say overcharging and profiteering cannot be controlled until and unless prices are worked out at manufacturing, wholesale and retail levels.

During raids in different cities of the province, the IPWM reports show that price control magistrates took action against 374 shopkeepers and vendors on Thursday (June 15), while 1,879 profiteers were caught on Wednesday (June 21).

Data highlights that price control magistrates took action against 352 shopkeepers who were overcharging consumers, registered 211 FIRs and arrested 233 vendors and traders on profiteering on Tuesday.

It shows that over 11,600 shops and kiosks were inspected in 2,066 markets across Punjab. Price control magistrates imposed penalties of over Rs2.3 million of which Rs356,000 in fines were imposed across Faisalabad alone.

Data further highlights that 141 traders and shopkeepers were caught fleecing consumers by using altered weighing and measuring scales. The department has initiated legal action against shopkeepers who were found involved in this unethical and illegal practice.

Legal and economic experts argue that there were only 1,766 price control magistrates, mostly performing price control function as an additional responsibility, for the most populous province of the country.

A law practitioner, Advocate Azhar Siddique, said: “We are trying to regulate 21st century trade with an obsolete law, which is the Price Control and Prevention of Profiteering and Hoarding Act 1977.

This law had several basic lacunas, like it only penalises retailers or small vendors. It does not cover middlemen who make windfall profits and do not fall under the tax net.”

He further said auctioning agriculture produce in wholesale markets was also a flawed system which encouraged middlemen to exploit farmers. In addition, the law has very limited or meager penalties that virtually make it toothless for businesses making windfall profits. “If a middleman or retailer makes hundreds thousands through profiteering and hoarding, it will be peanuts for them to pay a few thousand rupees in fine,” he maintained.

Azhar proposed that the government introduce a special Price Control Authority in the province which would work out prices at manufacturing, wholesale and retail levels and decide profit margins with the business community.

This authority should also be responsible for monitoring demand and supply of different commodities to avoid exploitation of farmers and consumers.

Published in The Express Tribune, June 22^nd, 2017.