By Godfrey AKON
An investigation has exposed the wantonness of exploitative pricing in Nigerian markets, as a fruit blender called Ninja, which sells for roughly N140,000 at a supermarket chain in Texas, USA, sells for N944,999 at a supermarket in Lagos.
The product was inflated more than 500 per cent of the cost, the Federal Competition and Consumer Protection Commission, FCCPC, which carried out the enquiry, said.
According to the Executive Vice Chairman of the Commission, Mr Tunji Bello, when FCCPC’s undercover officer visited the same supermarket two weeks earlier, this same blender was on display with the price tag of N750,000.
Bello, who spoke at a One-day Stakeholders’s Engagement on Exploitative Pricing in Abuja, on Thursday, queried the basis for such arbitrary hike in the price of the blender compared to the United States and what business principle that can justify this level of profiteering.
He added that this practice, which is known as price gouging, takes undue advantage of the consumers.
“Price gouging on the other hand occurs when sellers significantly increase the price of goods or services during a crisis or a period of economic challenge.
“For instance, our check just two days ago at a popular supermarket chain in Texas, United States, revealed that a fruit blender called Ninja is displayed on the shelf at $89 (roughly N140,000). Just two days ago.
“Meanwhile, the same product was displayed at a popular supermarket at Victoria Island in Lagos for N944,999 on the same day and at the same hour. This represents more than 500 percent inflation of the cost,” he said.
He further lamented that in some notable supermarkets surveyed discreetly in Abuja, Kano, Port Harcourt and Lagos, the commission also found that prices were arbitrarily jacked up from time to time without any justifiable reason.
He said “In one particular big supermarket in Abuja, for instance, consumers were being charged N2,600 for an imported toilet soap at the payment point as the price tag was not displayed as earlier mandated by FCCPC. The same toilet soap was displayed for sale at N1,950 at a popular supermarket in Lekki, Lagos the same day. That already constitutes a double offense.
“From our findings, the penchant to hike prices arbitrarily is also common among sellers of food items and transport operators. When the foodstuff sellers were engaged, their common response was that the cost of transportation had increased.
“But how justifiable is it for the tomato seller to double the price of a basket of tomatoes simply because they paid higher transport fare? Whereas the price of the same basket of tomatoes was far cheaper at another market within the same jurisdiction surveyed by our field officers. Now, the question: did the seller who sold at a lower price not also pay transport fare?”
Speaking on price fixing, from the findings of the commission, the penchant to hike prices arbitrarily is also common among sellers of food items and transport operators.
“When the foodstuff sellers were engaged, their common response was that the cost of transportation had increased. But how justifiable is it for the tomato seller to double the price of a basket of tomatoes simply because they paid higher transport fare?
“Whereas the price of the same basket of tomatoes was far cheaper at another market within the same jurisdiction surveyed by our field officers. Now, the question: did the seller who sold at a lower price not also pay transport fare?
He further noted that “in a typical foodstuff market environment, this is how price fixing happens. A trailer-load of yam tubers arrives Wuse market in Abuja from, say, Benue state. Rather than allow free trade, the market cartel then insert themselves between the produce farmers and the retailers.
“They buy in large quantities from the producer at cheap rate and, in turn, sell to market retailers at much higher price. And the retailers, in turn, sell to consumers at cut-throat rate.
He therefore warned that such price fixing is no longer acceptable and FCCPC will henceforth crack down on those involved in this profiteering scheme.
Earlier, FCCPC’s Executive Commissioner of Operations, Dr Abdullahi Adamu, clarified that the commission is not a price-fixing agency, but is free to engage with stakeholders or take punitive measures against violators where necessary.
Bello said the commission was passionate about the consumption of goods and services but the way market forces are working in the country is not acceptable.
He added that price fixing, price gouging and exploitative pricing were unfortunate developments that should be brought to a halt.
