Supply chain analysis to be ready by 3Q

by AFIQ AZIZ / pic by MUHD AMIN NAHARUL

THE government’s supply chain analysis, which would allow the authorities to gauge a precise data on the reason behind the rising cost of consumer items, is expected to be concluded by the third quarter (3Q) this year.

Domestic Trade and Consumer Affairs Minister Datuk Seri Saifuddin Nasution Ismail  (picture) said the study, which was initiated early this year, included 10 consumer items in its pilot programme.

He said the study is important as it would help the ministry to understand the real situation along the supply chain that would be instrumental in the formulation of any policy change that could improve the current situation.

“The study helps us to get precise data on how many layers of parties that are involved in a whole supply chain for the individual items and which particular element is contributing the most significant cost before it reaches the consumer,” he told a media conference in conjunction with Pakatan Harapan’s first anniversary in Putrajaya yesterday.

Saifuddin Nasution said the ministry has so far identified an importer who gains up to 133% of business margin before the products reach the wholesaler.

“We have also come across an item where the wholesaler marked up about 67% of the margin before reaching the retailer.

“So, we need to ask them why there is such a high margin. Is it because of utilities, wages, rental or transportation cost?” he said, adding that the Price Control and Anti-Profiteering Act 2011 could be used if the margin is found to be unreasonable.

Saifuddin Nasution said the 10 items, including eggs, several kinds of vegetables, meat, chicken and onions were proposed by Bank Negara Malaysia, the body that is part of the National Cost of Living Action Council.

He said the report was presented for the first time to the Cabinet on Tuesday for comments.

He added that some amendments and adjustments are expected before it could be finalised by September.

“By having this report, it will guide us to advise the government if any particular policy such as approved permit import for certain items should be revised.

“The data will also help us to further determine if some items should be included in the consumer basket,” he said.

The data will also help the Domestic Trade and Consumer Affairs Ministry (KPDNHEP) officers to tackle all the right elements during enforcement.

Saifuddin Nasution said the ministry would also consider publishing the findings as part of the ministry’s consumerism advocacy initiative.

“As consumer advocacy is part of my main objective moving forward, I would love to show these findings to the people. However, this mechanism is quite new to us, so we plan to leverage this for our internal use first.

“Once we are comfortable, with a better understanding of the matter, we may consider to share it with the public,” he added.

Saifuddin Nasution said as of last year, KPDNHEP had received around 26,000 complaints, 31% of which are pertaining to price hikes.

He said half of the complaints referred to an increase in food and beverage services, such as restaurants and other eateries.

The price hike issue among consumer items has been lingering since the new government took over the administration in May last year, despite the removal of the multilayer tax — the Goods and Services Tax — that caused more than RM20 billion of losses to the government’s revenue.

KPDNHEP was tasked to monitor consumers’ essential items to ensure that the price tag would remain within the affordable and reasonable bracket.

Saifuddin Nasution said the ministry was allocated an extra 100 new enforcers this year, on top of the current 2,294 officers who are dealing with various consumers’ complaints including the price of items and counterfeit products.

He said the portion is still small compared to more than 32 million Malaysian citizens, exclusive of migrants.