Retailers Will Suffer Huge Losses With New Ceiling Price Says Mydin Boss
The government announced yesterday that cooking oil in 5kg bottles will be capped at RM34.70 from Aug 8.PETALING JAYA: The head of a major hypermarket chain has voiced concern that retailers will suffer huge losses because of the new ceiling price of cooking oil in 5kg bottles.
Ameer Ali Mydin said big retailers like hypermarkets will not be able to sell off their existing stock before the new ceiling price of RM34.70 kicks in on Aug 8.
“When it comes to items with a longer shelf life like cooking oil or sauce, we carry about a month’s worth of stock in our warehouses and stores,” the Mydin managing director told FMT.
“It’s not like chicken or tomatoes which we have to replenish every day.”
Ameer said he understood that the government wanted to control the price of cooking oil as manufacturers were not lowering their prices and the people were affected.
Ameer Ali Mydin.“It’s good that they gave us a week’s notice but the reality is that we will not be able to clear our stocks within one week, there will be many who will put off on their decision to buy cooking oil till next week.
“We (Mydin) bought our current stock of cooking oil at RM38 per bottle and we’re selling it at RM39.90. Our current stock of cooking oil is worth RM3 million.
“If we’re forced to sell each bottle at RM4 less than the price we paid for it, then we’re going to suffer huge losses. Who will bear those losses?” he said, adding that even a leftover stockpile of 80,000 bottles before Aug 8 would mean losses of RM320,000.
Ameer said that even after the government lifted price controls, retailers could not increase prices overnight as they had purchased their stock at a cheaper price.
“If we increased our prices overnight, we’d be contravening the Price Control and Anti-Profiteering Act 2011,” he said.
He said the government cannot use the same price control mechanism for cooking oil as it does for fresh food.
“My concern is that retailers will stop stocking up on goods if this problem is not resolved for fear of losses. This could lead to shortages.”
He proposed that the government instruct manufacturers to give retailers a credit note for unsold bottles they bought before the announcement of the new ceiling price.
Yesterday, anti-inflation task force chairman Annuar Musa announced that cooking oil in 5kg bottles will be capped at RM34.70 from Aug 8.
Annuar, who is also the communications and multimedia minister, said the price will be fixed on a monthly basis and calculated based on the price of crude palm oil during the previous month. - FMT
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