Save the Consumers makes efforts globally to keep the consumers’ rights protected, however, Nigeria’s food sector price inflation and abuse of consumers is a concern for this advocacy organization. It has been observed over time by this organization that Nigeria’s food sector contributes to price inflation and hoarding, and that’s malpractice to distort the market and exploit the consumers, especially the ones belonging to the lower class.
Food sector price fixing is endemic in Nigeria and as a result, millions of consumers especially the vulnerable ones are deprived of their welfare. Save The Consumers as a consumer protection specialist selflessly fights for consumers’ rights calls for stronger unfriendly price manipulation policies, tougher enforcement and more transparency in tackling this immoral behaviour. The overall price-fixing determinants in Nigeria need to be addressed to make food affordable and safe for consumers.
PRICE MANIPULATION IN THE SECTOR OF FOOD
Food hoarding, artificial scarcity, or price hikes are some of the reasons that underpin price manipulation in the country’s food sector. To many, it is an unethical form of business practice that not only encourages monopoly but also avails the consumer with limited purchasing power. Nigeria is a victim of food sector price manipulation because of poor governance, limited competition, and shocks like inflation that take a toll on consumers of food.
HEAD FORMS OF PRICE MALPRACTICE IN THE NIGERIAN FOOD SECTOR
Deliberate Hoarding: More often than not, we observe during markets and religious events like Christmas food shortage only to witness it become available at an increased price markup, and in these times food peddlers and distributors withhold food from the supply.
Such manipulation creates a perception of scarcity which enables the consumers to cough out more money in order to not miss out on these necessary items.
Supply chain controls: Due to their dominance, food manufacturers, wholesalers, and distributors exercise control over food supply lines which creates an artificial shortage of items such as rice, tomatoes and cooking oil to increase their prices.
PRICE GOUGING DURING CRISIS SITUATIONS
Festive periods: While there are food shortages during peak religious holidays, such as Eid and Christmas, some traders take advantage of the economic landscape to manipulate food prices. These inflated prices account to a large percentage of raw supplies but do not accurately depict their cost. Report to http://www.savetheconsumers.org
EXPLOITATION OF FARMERS AND PRODUCERS
Unfair pricing by middlemen: When farmers sell their produce to outside sources, such as “cabbage” (in rural settings), they have no other option but to sell to middlemen, These middlemen tend to set unreasonable prices for the farmers which is unwarranted.
The same products are then sold in urban markets at very exorbitant prices, with the shoppers suffering from such manipulation.
Insufficient direct sale access: A considerable number of the farmers do not have direct market interactions with the clients or with the selling points, making them reliant on brokers who are notorious for distorting the prices. To this end, local staple foods such as grains, vegetables, and livestock are overpriced due to men in between.
CONSEQUENCES OF PRICE MANIPULATION IN THE FOOD SECTOR
In the instance of Nigeria for example, price manipulation has far-reaching after shocks on the Nigerian consumers and the economy at large.
- Increased Poverty and Food Insecurity: A huge percentage of the Nigerian population suffer from extreme levels of hunger owing to the impact of the increase in import prices for most essential staples leading to high rates of food inflation where Higher tariffs are levied on these import staples making least intermediaries, active in breading selling of imports in Nigeria, liable of not being able to fully offload their purchases for a profit thereby denying a large cut of the population access to food especially the poor with struggling households. This inflation, in return, increases the prices of most staple every day food items which further raises starvation levels across Nigeria.
Vulnerable Groups: Vulnerable groups like children, the old and disabled people tend to bear the most brunt as they may have limited access to food on account of their purchasing power.
- Worsened Inflation: Price manipulation in the cost of food tends to contribute to the inflation rate in the economy of Nigeria. For instance, while the price of foodstuff tends to increase, the cost of transport, that of housing and even healthcare would http://www.savetheconsumers.orgbe impacted. Such complex scenarios aggravate the economic situations that typical Nigerian consumers endure as such consumers would allocate considerable portions of their incomes to food.
- Undermining Trust in the Market: Pervaded with lack of transparency with food pricing and the disease of price manipulation, it affects consumer confidence in the market. Such belief destruction can result in the sales of such businesses declining due to the assumed belief that the consumers were exploited thereby driving them away and reducing the amount of sales to go both sellers and consumers to losses in the long run.
- Unethical Business Practices and Exploitation: As for the price manipulation of intermediaries and retailers vice versa, it creates an abuse culture where exploited and distressed consumers and farmers live. This brings forth lack of ethical practices and destruction of trust notion between consumers and businesses thus creating a great environment to enforce violation all in the market.
SOLUTIONS AND RECOMMENDATIONS FROM SAVE THE CONSUMERS
- Stronger Regulatory Oversight: To begin with, the government of Nigeria must implement price collusion by putting an embargo on how far traders and businesses can be able to go and alter food prices leading to collusion in the first place.
For Effective Remedial Action Regulated Consumers Pricing Enforcement is Necessary A scenario where a pricing framework is dominated by the aspects of both balance of transparency and fairness needs to be upheld and enhanced as evidenced by the works of regulatory entities like the Consumer Protection Council (CPC) and Nigerian Competition and Consumer Protection Commission (NCCPC). http://www.savetheconsumers.org
Ensuring the monitoring of food supply chains might be more effective: Authorities should supervise all systems of food from production to retail including shipment by controlling all food supervision systems. In doing so, one would be able to control as well as to restrict the aggressive competition practices of price manipulation. http://www.savetheconsumers.org
- Strengthening of Common Causes of Food Scarcity and Explaining the Hold Up Of Food Demand and Supply
There is also a suggestion among Save The Consumers to use more local farmers’ stocking firms or producers selling directly to the consumers through the usage of farmers' markets or online applications.
UNDERSTANDING OF GLOBAL DYNAMICS AND MARKETPLACE SOLUTIONS THROUGH LOCAL FOODISM EDUCATION
Adoption of focus on local farms should be backed by the vision that Nigerian agriculture is the priority as a nurtured industry enabling the economy policy to politically stabilize food prices while enhancing the integration of food production and distribution across self-sustaining markets. That would mean subsidies, the latest agriculture standards, and easier access to loans for poor farmers.
Controlling over import headwinds: Import controls and increased local manufacturing policies will help combat externalities such as the exchange rate that tends to trigger food inflation.
Transparency on the prices that are charged to consumers. Save The Consumers requests the authority to issue clear directives on the food products focusing on labelling such foods and the prices so that price comparison can be easily done by consumers.
Name and shame non-compliant businesses: Businesses who are found involved in price manipulation should be fined, penalized, and be named publicly. This will serve as a warning to other companies. http://www.savetheconsumers.org