Govt must ensure cheaper business supplies translate into lower prices, says Fomca
PETALING JAYA: The government should monitor prices before and after traders receive discounted business supplies to ensure the planned Domestic Trade and Cost of Living Ministry initiative ultimately benefits consumers, the Federation of Malaysian Consumers Associations (Fomca) told theSun.
Its CEO Dr Savaranan Thambirajah said reducing input costs could help contain price increases, particularly among small businesses in which raw materials and operating expenses directly affect selling prices.
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“Fomca welcomes the initiative because assistance should not only focus on consumers after prices have increased, but also address the cost pressures at the business level before they are passed down to consumers.
“However, lower input costs do not automatically mean lower consumer prices. The important question is whether the savings enjoyed by traders will translate into stable, reasonable or lower prices for consumers.”
He was commenting on the proposed programme announced by Communications Minister Datuk Seri Fahmi Fadzil on Oct 3, which would allow traders and hawkers to purchase basic goods and supplies at discounted prices.
Savaranan said the ministry should establish baseline prices for participating traders and track any changes after they begin receiving discounted supplies.
He added that this would allow the ministry to assess whether government assistance was translating into measurable benefits for the public rather than merely reducing business costs.
“The success of the programme should not be measured merely by how many traders participate or how much discounted supply is distributed. “It should also be measured by the impact on consumer prices.”
He also called for clear eligibility requirements and safeguards against abuse, including the resale of discounted supplies, multiple claims, leakage and diversion of goods to those who were not eligible.
He said participating traders should identify themselves as recipients of the programme and, where practical, indicate which products or menu items were benefiting from the initiative.
However, Saravanan said discounted supplies alone would not address all the pressures faced by small businesses, with operating costs also covering rent, electricity, transport, logistics, licensing, compliance and digital platform commissions.
He added that competition throughout the supply chain should also be strengthened, particularly where essential goods were concentrated among a limited number of suppliers or subjected to excessive margins at different stages of distribution.
“At the same time, we must be fair to small traders. We cannot expect hawkers and small businesses to absorb every increase in operating costs indefinitely.
“The solution is to reduce unnecessary costs and inefficiencies throughout the supply chain while ensuring that government assistance ultimately produces measurable benefits for consumers.”
Saravanan said the principle should remain that when public resources were used to lower business costs, consumers should ultimately see the benefit through more reasonable and stable prices.
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