FMCG retail price hikes to be verified for reasonability

The Directorate of National Consumers Right Protection (DNCRP) will form a committee to investigate whether recent hikes in the retail prices of fast-moving consumer goods (FMCG) were a reasonable ripple effect of external factors. 

The factors include a rise in the price of raw materials, fuel, shipping and transportation costs and exchange rate of the dollar against the taka.

The four-member committee will comprise representatives from the Bangladesh Trade and Tariff Commission, The Institute of Cost and Management Accountants of Bangladesh, DNCRP and FMCG manufacturing companies.

The committee will begin its work next week.

Recently, consumers complained to the DNCRP that some companies involved in the FMCG business have unreasonably increased the prices of various products.

In view of this, a meeting was held at the directorate's office at Karwan Bazar in Dhaka yesterday when the DNCRP asked to know from representatives of the FMCG companies the reason behind the price hikes and the rates of increases.

In the meeting, officials of Unilever Bangladesh, Advanced Chemical Industries (ACI), Square Toiletries and the Kallol Group of Companies explained why they increased the prices.

"The resolution of today's meeting will be prepared tomorrow (today). Then the committee will be formed," said AHM Shafiquzzaman, director general of the DNCRP.

"We will see the companies' cost sheets, at what price they are buying the raw materials and then at what price they are selling the products," he said. 

"Only then will it be understood whether the price increases are reasonable or unreasonable. Then a report will be prepared. It will be submitted to the commerce ministry," he added.

At the beginning of the meeting, Shafiquzzaman told the representatives that common people believed that they had unfairly increased the prices. "That's why you have to make it clear to the consumers," he said.

"The cost sheet is a very confidential document. Sharing it is a big challenge," said Zahidul Islam Malita, chief financial officer of Unilever Bangladesh.

"Questions may arise in the minds of many people whether the amount of price increase is reasonable or unreasonable," he said.

"Some 80 per cent of the raw materials of our industry is imported. The increase in the price of raw materials and the dollar price hike impacted the business," he added.

"When the price of a product increases, the consumer will reduce its consumption. However, considering the overall situation, the price has been increased," Malita added.

Officials of the remaining three companies echoed him.

This correspondent went around two markets in the capital yesterday.

A well-known brand of bath soap weighing 150 grammes sold for Tk 58 a year ago but now was going for Tk 75, meaning that it had undergone a 29 per cent price increase.

Similarly, a 500-gramme packet of detergent priced at Tk 60 in January is now selling for Tk 90. This means, the price has increased by 50 per cent in a span of eight months.

In the case of a 100-gramme toothpaste, the price had gone up from Tk 70 to Tk 75 in the April-May period to Tk 85 to Tk 95 at present, meaning a rise of 21 per cent to 27 per cent.