More food inflation as fuel price hikes increase production, transportation costs
Business
Utter state failure as officials are even unable to implement daily price lists
LAHORE/OTTAWA (Web Desk/Reuters) – As authorities in Pakistan even fail to enforce the official price lists updated daily for food items, Reuters says Canada plans to amend its competition laws to enable the regulator to act against anti-competitive mergers in the grocery sector, as the government steps up efforts to battle rising food prices.
Read more: Pakistan food inflation stays high at 38.5pc as 'IMF reforms' kick in
It is the latest example of the state intervention at the highest level as the governments across the globe are dealing with the inflation and purchasing power crisis with a special focus of food inflation.
However, the state interventions in Pakistan are currently limited to hiking fuel prices as well as power and gas tariffs, leaving the people at the mercy of hoarders and profiteers who use demand and supply rule to their advantage.
Read more: Staggering Rs26 increase in petrol price leaves masses high and dry
According to Reuters, Canadian Prime Minister Justin Trudeau had earlier said he had summoned the heads of Canada's top grocers to Ottawa next week to discuss their plans to control food prices.
The government could impose new taxes on the grocery chains if they do not provide a convincing plan to limit the rise of food prices, Trudeau said.
Moreover, the amendments will also provide the Competition Bureau with powers to compel the production of information to conduct effective market studies, a release, dated Sept 14, from the Prime Minister's Office said.
Trudeau had also vowed to cut federal taxes on new rental buildings, as he fights an affordability crisis that has dented his party's opinion poll ratings.
He said the government asked the executives of the five largest grocery chains to come to Ottawa next week to explain how they will stabilize prices. The five companies, representing 80 per cent of the Canadian grocery market, have until Oct 9 to come up with a proposal.
"If their plan doesn't provide real relief ... we will take further action and we are not ruling anything out, including tax measures," said Trudeau.
"It does not make sense in a country like Canada that our largest grocery chains should be making record profits while Canadians are struggling to put food on the table."
In 2022, Canada's three largest grocers – Loblaw, Sobeys, and Metro – collectively reported more than C$100 billion ($74bn) in sales and earned more than C$3.6bn in profit.
Trudeau, who is under pressure over a lack of affordable housing, said his government will remove the federal 5 per cent sales tax on the construction of new rental apartment buildings.
"There are many developers and builders that are not moving forward with building new apartments because the costs are simply too high," Trudeau said, adding the measure will lead to the creation of many new apartment buildings.
Trudeau's minority government is propped up by left-leaning New Democrats Party and election is only due in 2025. But opinion polls show the main opposition Conservatives, who accuse Trudeau of driving inflation through high government spending, would win power and end eight years of Liberal rule if an election were held now.
BOOSTING COMPETITION
Several grocery executives denied profiteering charges in a parliamentary committee earlier this year. But the lack of competition in the grocery sector has also irked the competition watchdog, and in June, it said more players were crucial to combat soaring prices of essential goods.
Trudeau waded into that debate and said his government will remove provisions in competition laws that companies use to defend big mergers, saying cost savings outweigh negative impacts on competition.
Soaring food prices have been a concern for European governments as well and in March the French government reached a deal with the country's main supermarket chains to help shoppers cope with food prices, Reuters reported.
STATE OF AFFAIRS HERE IN PAKISTAN
Issuing the price list [basically covering perishable food items] is a daily exercise for deputy commissioners for their respective districts. But getting the same implemented through price control magistrates is also their responsibility – a job they are failing to fulfil miserably as people have been crushed by the record-high inflation.
Read more: Egypt inflation hits record high of nearly 40pc as dollar crushes its currency just like Pakistan's
It is only the poultry prices [chicken and eggs] which are followed strictly across the country. But the reason behind this practice is not the government machinery but a strong business body of those associated with the poultry sector, protecting the interests of its members.
Unfortunately, the price lists have become worthless as the shopkeepers and vendors are supplying the vegetables, fruits and meat are excessive rates – up to 20pc to 30pc than the official prices.
Checking the prices is now a provincial subject after the 18th Amendment, which are unable to control soaring food prices – including wheat and sugar.
But rising flour and sugar prices are a result of policies adopted by the Centre and their smuggling across the western borders, which is a federal subject. Hence, federal and provincial governments are equally responsible for the high food inflation.
However, the things do not stop there as the government is repeatedly increasing the fuel prices and has been unable to check the rates of inputs used in agri sector, thus automatically raising the production and transportation costs.
