Remove approved permit system for lower food prices, says consumer group

Fomca says consumers will benefit from lower prices if the approved permit system is axed.

PETALING JAYA: The Federation of Malaysian Consumers Associations (Fomca) today urged authorities to do away with the approved permit (AP) system for food items and replace it with a more open importing system which would benefit consumers through lower prices.

In a statement, Fomca secretary-general Paul Selvaraj said retailers could not import many food items except through AP holders.

“With the APs, the holder charges a fee with no value added and passes that fee on to buyers. This additional cost is passed on to consumers as higher prices.

“Fomca has met several retail companies who are confident that they can import food at lower prices and pass the savings on to consumers.

“But the AP system forces them to purchase only from AP holders, resulting in higher prices for consumers in buying essential food items.”

Paul called on the government to identify the AP system on food and essential items in the various ministries, adding that Fomca had failed to obtain the full list of AP holders in these areas.

“Actions to eliminate APs for food should then be taken. We are confident that with the removal of APs and a more open importing system, consumers will benefit through lower prices.”

Earlier this month, Agriculture and Agro-Based Industry Minister Salahuddin Ayub said the government was looking to break Padiberas Nasional Bhd’s monopoly over the supply of rice in the country.

He said this would be done by granting the same licence to other companies as well.

He added that he would discuss the matter at the ministry level before drafting a proposal and submitting it to the Cabinet.

Paul hailed this development, saying Fomca fully supported the elimination of the rice and sugar monopoly.

“But this is not enough,” he said.

He also called on the government to review the food supply chain, claiming there was extensive price fixing and price manipulation at various levels.

This in turn distorted the price of food items, resulting in higher prices for consumers, he added.

Paul also said Fomca had long advocated a Competition Commission to study the food supply chain to ensure a free market which would lower food prices.

“We hope the government will seriously look into the Competition Commission’s role to ensure that it fulfils its tasks of freeing markets and eliminating all forms of monopolistic behaviour which would result in enhancing consumer well-being and consumer welfare,” he said.

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