Our View: Consumers’ Association seems to forget we live in a market economy

The Cyprus Consumers’ Association (CCA) appears to have misunderstood its role. It is not a price monitoring service that decides whether price increases are acceptable or not, as the association seems to think, issuing announcements every month or so to complain because the price of some basic good had risen ‘unjustifiably’ by two or three per cent.

The role of a consumer association is to safeguard the rights and interests of consumers, protecting them from devious and misleading practices by businesses. It does not exist to issue rulings on what price rises are justifiable. Perhaps the CCA leadership has not realised we live in a market economy in which the forces of supply and demand determine prices and not bureaucrats with a socialist political agenda.

On Wednesday, the CCA issued an announcement urging the authorities to impose a price ceiling on fresh milk because it was a basic necessity. The price had gone up by three per cent, which could hardly be described as an extortionate rise – about five cents per litre of milk – that justified a call for a price cap. When the cost of fuel and electricity has increased dramatically and the price of animal feed has gone up, it is inevitable that the price of milk, like so many other products, would follow.

The European Commission’s forecast for inflation in 2022 is 2.6 per cent, making the increase in the price of fresh milk far from unreasonable. Prices of most consumer products have gone up in the last few months, many by more than the three per cent of fresh milk, which has infuriated the CCA. After many years of stable prices all of Europe is experiencing inflation, related to the supply chain problems caused by the pandemic as well as the quantitative easing. Are the CCA workers not aware of this trend?

They are, which is why the statement about milk, acknowledged “there are noticeable increases in production costs.” It added however that “these increases should be taken into account in the context of previous increases and not in the context of a year-on-year increase.” These are the views bureaucrats with a socialist political agenda, wanting to pressure the government into intervening in the workings of the market. This is why the CCA attacked the State’s Consumer Protection Service, for failing to fulfil its role.

Is the role of the state to set price caps and give approval to price rises? Has the CCA not realised that it is not operating in Venezuela, but in an EU state that embraces the economics of the free market?