Prestige Holdings reported a 21 per cent decline in its after-tax profits and a two per cent increase in its revenue for its 2016 financial year, as the restaurant management company opened seven...
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Consumers need to grow teeth
Economic boycott is one of the most powerful tools available to the consuming public. It does not require any membership fees. It just requires standing up to those businesses that engage in price-gouging.
Not too long ago, as a result of irresponsible union action, the price of cement skyrocketed from approximately $42 a bag to prices ranging from some $70 to $100. The strike action failed, the workers went back to their jobs but the price of cement did not go back down to its former value. It increased by some 25 per cent. Consumers took it in their stride.
Now that VAT has been removed from many food items, the word around is that food prices have not really dropped at all retail outlets. So again consumers are left holding the sticky end of the stick. To address this situation, proposals are being bandied about with the intent of giving teeth to the Prices Council. That would require legislation and implementation mechanisms to, in effect, give biting power to the council to deal with unscrupulous business people.
But why do we need someone else to bite those who are shamelessly gobbling up large chunks of our earnings? Are we toothless pawns who cannot engage in fiscal fasting? Are the jingles of the business sirens so irresistible that our economic boats are automatically drawn to the sharp rocks of business greed to be shattered?
The attitude of the average Trinbagonian with regard to unreasonably high prices defies not only the laws of logic and good sense but apparently also provides motivation to those engaging or intent on engaging in financial skulduggery and economic piracy. When prices are raised, instead of refusing to buy, we rationalise (or is it irrationalise?) that we need the items so what can we do but buy them.
Let them keep their goods. If we do not buy, then they have no business. Consumers must come to recognise that business is a partnership between those who sell and those who buy—equal partners. We have the power to influence the equilibrium point—a fair and reasonable price for the consumer and a decent profit for the business.
And here we come to the crux of the matter. What is a decent profit? Ten, 20, 100 per cent of investment? It would appear that there is no limit! Apparently in the world of profit-driven capitalism, all is fair in love, war and business. That sort of attitude, deifying and worshipping greed, has the world in a financial mess at present. Consumers can be the moderating force to excesses of inhumane capitalism.
Examples of consumer power abound in both the developed and developing worlds. A few years ago, in India, hoarders jacked up the price of onions, a traditional staple in the Indian diet. It was very difficult for Indian consumers to do without their onions. But they held fast to their position. Drop the price or let the onions rot in the warehouses. Guess what? The price came down.
Consumers have used their purchasing power to cause many large companies to respect the environment and wildlife. We need to rein in unscrupulous businesses. It is far too easy for businesses to pass on the cost of their inefficiencies to the consumers. It is a sickening refrain we hear all the time from business leaders: the rising cost will have to be passed on to the consumers.
They need to absorb some costs also. And further ,why can’t they optimise their operations to reduce costs and temper their greed? Many have commented that T&T constitutes the nearest thing to business heaven. Consumers seem oblivious to price-gouging. They must change that mindset by insisting on value for money and by holding fast to the position, on an individual and collective basis, that prices cannot be rising on a weekly basis as seems to be the case.
The opportunity now presents itself for the consuming public to set the tenor for the new consumer culture by insisting the items which have been VAT-exempted must reflect the corresponding decrease—or the offending businesses would feel the economic bite of their newly-emerged teeth.